June 24, 2024
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A firm declared ₵342k/month sales instead of ₵158m; paid ₵40k VAT instead of ₵19.8m ~ Ofori-Atta justifies 3 new taxes

Finance Minister Ken Ofori-Atta has said: “I believe most of us [Ghanaians] do not pay taxes” and parried complaints by traders and the general public that the recent passage of three new taxes is overburdening the already-overtaxed Ghanaian.

Speaking on the sidelines of the IMF’s Spring Meeting in Washington DC, Mr Ofori-Atta said Ghana’s current revenue-to-GDP ratio of 13% instead of 20%, is testament to his belief that “a third of taxes that should be paid are not being paid.”

For example, he said following the introduction of the e-VAT, “there was a company that was reporting ₵342,000 of sales a month and paying ₵40,000 in VAT” but “after the system was put in place, sales were ₵158 million a month and VAT was ₵19.8 million”.

“So, you begin to understand some of these people that GRA is over-auditing them clearly are not doing what they’re supposed to do”, The finance minister noted.

He said the new taxes are necessary for now.

“So, once you begin to get all of these appropriate taxes in place, certainly you then get into a period where you actually, as we came in 2016 – you remember in 2017 we cancelled a lot of taxes – as we begin to build up, then certain taxes may not be necessary, but we need the revenue now to be able to move in that direction”.

He said: “I believe that the digitalisation will help, and, as we move toward, 18 to 20% revenue-to-GDP [ratio], it will ease”, because we, as a market-oriented philosophy for our government, will always look for ways in which we will make our businesses pay as little taxes as possible to ensure that employment and expansion comes into place, but there are periods in which we need to generate appropriate taxes so that we can fund the budget”.

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