Tax expert and former Minister for Finance, Seth Terkper, has shared his thoughts on some findings made by Pan-African and nonpartisan survey research network, Afrobarometer, in its latest survey on the willingness of Ghanaians to pay taxes to government.
According to Afrobarometer in its latest survey, it observed that about 72 percent of Ghanaians are willing to pay higher taxes to finance the country’s development rather than allow the country rely on aids, grants and loans for development.
The survey was conducted on the back of newly introduced taxes particularly the 1% Covid-19 Levy added to VAT and the 1% tax addition to the NHIL Levy by government in the 2021 Budget Statement.
Speaking in an interview monitored by norvanreports, the former Finance Minister opined that the findings by the survey would have been different if the questions asked were more specific and skewed towards businesses rather than individuals since businesses pay more taxes.
“The answers would have been completely different if the questions were skewed to specific issues and I don’t know if the interview went to businesses as well because businesses pay more of the taxes, so if we want to be representative when we say Ghanaians then we also mean legal entities which are businesses, then that will be even more meaningful,” he opined.
His assertion of Afrobarometer’s findings possibly having a different outcome is premised on the fact that, the additional 1% Covid-19 Levy and 1% NHIL Levy which increases the costs of production by businesses was opposed by the business community when announced during the 2021 Budget Statement reading.
“NHIL and GETFund, were being collected as VAT and it gave businesses the mechanism allowed to deduct input tax because it’s not a consumer tax, and not a corporate or income tax which businesses have to pay. It is the tax businesses are collecting on behalf of the government and businesses pay tax on input.”
“Now government takes it from VAT and blocks the tax on input such that businesses are now going to be charged VAT, NHIL and GETFund which increases the cost of production.”
“And If I want to be a responsible taxpayer and do not want to evade, and I am in competition with people who do not have any compulsion to tax evasion or avoidance, they will do use any means to avoid the payment then I that wants to be a dutiful citizen will be priced out because I will be adding those taxes directed by government just because I want to get a tax relief. And so it’s not surprising that when some of these taxes where announced, the first to protest were the Chamber of Commerce and the AGI.”
“As an informed tax payer, I have a lot of disagreement, the answers would have been completely different if the questions were skewed to specific issues,” he stated.
Speaking further, he noted that the willingness of Ghanaians wanting to pay more taxes as posited by the report is conditional, premised on the fact that government’s use of tax revenues is justified.
“The willingness of Ghanaians to pay taxes is not unconditional but conditional, given that the taxes they pay are justified in government’s expenditure,” he added.
Afrobarometer in its findings reported that Ghanaians are willing to pay more taxes if government does a good job of delivering basic services, addressing educational needs, providing water and sanitation services, maintaining roads and bridges, and providing a reliable supply of electricity.
