According to former Finance Minister Seth Terkper, Ghana’s current tax system is the harshest and most punishing in the country’s history.
Since 2017, the New Patriotic Party administration has been charged by the opposition National Democratic Congress for enacting more than fifty new levies.
Ghanaians are furious because taxes are being imposed incessantly. The Value Added Tax (VAT) on domestic power usage and the emissions fee are the two most recent levies imposed on Ghanaians.
During a Monday interview, Mr. Terkper maintained that the nation’s existing tax rates are unduly high, as Hanson Agyemang of Citi News noted.
He clarified that such high rates could encourage people to look for ways to avoid paying these taxes.
“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 tax that is punitive, you will end up not collecting, or generating as much revenue as possible,” he said.
He further underscored that “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. And the evidence is that if you look at our tax-to-GDP ratio well until recently as GRA is claiming, the highest point at which revenue was collected was 2015 per the percentage of GDP, not nominal terms.”
