Wobbling economy warranted high taxation –Terkper

Former Finance Minister, Seth Terkper has dismissed claims that he supervised an economy which focused on taxation at the expense of production.

He explains that he cannot be blamed for what the NPP believes is the huge tax burden brought onto businesses.

“…When the economy takes a hit, you would have to make sure that GRA rakes in as much revenue as possible and that was the focus,” Seth Terkper asserted.

Finance Minister, Ken Ofori Atta in his 2017 budget presentation criticized the NDC for the numerous taxes levied on the private sector.

According to him, the plan adopted by the erstwhile administration rather worsened the plight of local businesses inhibiting their growth.

The development also informed the NPP’s tax cuts agenda.

Already, eight taxes have been tipped to be abolished with four others expected to be reviewed to bring relief to businesses.

But Seth Terkper maintains his strategy of increasing taxation was to avert dire consequences for an unstable economy at the time.

“…The management of the economy has a context such that if you are going to focusing on too much productivity when the economy is wobbling and the business sector itself is suffering, then that in itself is not good enough you are going to be borrowing for that stimulus because the taxes are not coming in and that in itself is not good enough.”

Though the NDC government was heavy on taxes, figures have shown that the government fell 11.1 percent short of the 2016 target for revenue and grants.

Meanwhile, expenditure for the period exceeded the target by 16.2 percent.

The fiscal slippages, therefore, resulted in a fiscal deficit on commitment basis of 10.3 percent of GDP and 8.7 percent on a cash basis.

But the Former Finance Minister tells Citi Business News any decision to have gone heavy on production could have led Ghana to increase borrowing which in his view, is not a sustainable idea.

“You are going to be borrowing for that stimulus because the taxes are not coming in and that in itself is not good enough. That is why many countries for austerity measures,” he added.

By: Pius Amihere Eduku/citibusinessnews.com/Ghana

Published on 6 March 2017 | 5:40 am at Source