Concerns raised over potential impact of Ghana’s new revenue measures on employment
Ghana’s recent passing of new revenue measures has faced criticism from tax experts and economists alike. The Income Tax Amendment Bill, the Excise Duty Amendment Bill, and the Growth and Sustainability Amendment Bill are expected to generate approximately GH¢4 billion for the government, but the measures have raised concerns about their impact on businesses and employment in the country.
Dr. Abdallah Ali-Nakyea, a respected tax expert and consultant, has cautioned against the passing of the new revenue measures, warning that they will increase the operational costs of businesses and potentially lead to higher unemployment rates. In an interview with the Daily Graphic, Dr. Ali-Nakyea explained that the Excise Duty Amendment Bill and the Growth and Sustainability Amendment Bill are likely to force businesses to pass on the increased duty to consumers through price increases, which could result in inflation. He added that the high operational costs of businesses, combined with these new taxes, would further increase their financial burden and potentially lead to downsizing.
Economist Kwame Pianin has also expressed concerns about the new revenue measures, urging President Akufo-Addo not to sign the bills into law. According to Pianin, the bills were not well thought out by Parliament and were passed without due consideration. He criticized lawmakers for failing to ask relevant questions during the bill’s consideration and accused them of passing borrowing bills that have contributed to the country’s economic challenges.
The passing of the new revenue measures has also faced opposition from business and traders associations and some Ghanaians, who fear that the measures will lead to the collapse and relocation of businesses in the country. Despite these concerns, the government has defended the measures, stating that they are necessary to complete processes to secure a $3 billion International Monetary Fund (IMF) program.
The debate around the new revenue measures highlights the ongoing challenge faced by policymakers in balancing the need for increased government revenue with the potential negative impact on businesses and employment. While taxes are an essential source of government revenue, poorly designed or implemented tax measures can result in unintended consequences, such as inflation or business closures. It is crucial for policymakers to carefully consider the potential impact of new tax measures on businesses, consumers, and the wider economy before passing them into law.
Furthermore, the criticism of the new revenue measures also raises questions about the role of Parliament in ensuring responsible fiscal management. Lawmakers must take their responsibility seriously and ask relevant questions to ensure that proposed bills are thoroughly considered before being passed into law. If not, the potential negative consequences could have a significant impact on the country’s economy and employment rates.
Ghana’s passing of new revenue measures has faced criticism from tax experts, economists, and business associations, who fear that the measures will increase the operational costs of businesses and potentially lead to higher unemployment rates. While the government has defended the measures as necessary for securing IMF funding, policymakers must carefully consider the potential impact of new tax measures on businesses, consumers, and the wider economy before passing them into law. Additionally, lawmakers must take their responsibility seriously and ask relevant questions to ensure that proposed bills are thoroughly considered before being passed into law.
