A former Finance Minister, Seth Terkper, has voiced his concerns about the tax system implemented by the Akufo-Addo government, calling it the “worst tax system” in Ghana’s history.
He believes that the current tax regime is excessively harsh and punitive, which may lead individuals to resort to tax evasion tactics.
During an interview with Citi FM, Mr Terkper stressed the importance of the government considering the heavy burden already placed on Ghanaians when formulating tax policies.
He stated, “I think we are seeing the worst of the tax system… It is the most punitive and worst tax structure that we have had. And as with every punitive tax, you will end up not collecting, or generating as much revenue as possible.
But more importantly, when you begin to introduce punitive taxes, taxpayers find ways and means of evading and avoiding the tax. So if you have a simplified tax regime it is better and compliance increases.”
The opposition National Democratic Congress (NDC) has also accused the New Patriotic Party (NPP) government of introducing over 50 new taxes since 2017.
The continuous imposition of taxes has sparked public outrage in Ghana, with the latest taxes including the Value Added Tax (VAT) on residential electricity usage and the Emissions Levy.
In response to the new taxes, the Trades Union Congress (TUC) and 35 organized labor unions have announced plans to stage a demonstration on Tuesday, February 13, after the government refused to withdraw the 15 percent VAT imposed on electricity.
The TUC and the 35 labor unions argue that they are already overly burdened, and the introduction of this new VAT will exacerbate their financial struggles.
