The Ghanaian government, through a majority vote by parliament, approved three tax proposals late Friday night to help boost the government’s income portfolio and bring in an additional GH4 billion yearly.
One of the prerequisites for Ghana to obtain a US$3 billion bailout from the International Monetary Fund is the approval of the Income Tax Amendment Bill, the Excise Duty Amendment Bill, and the Growth and Sustainability Amendment Bill.
The Minority, which demanded a vote on the legislation at every stage of the legislative process, did not support the proposals’ passage.
After a protracted meeting that lasted into Saturday, the majority defeated the caucus by a vote of 136 to 137.
While Ghana moves to catch up to the sub-Saharan average of 20%, the new tax measures, according to the government, will increase Ghana’s tax contribution to GDP from approximately the current 12 to about 18.
The minority expressed their objection to the new levies and claimed that if they were passed, the living conditions of Ghanaians would worsen.
“Any attempt to raise [taxes] will result in hardship for the average Ghanaian.
“While discretionary earnings have already decreased, this government aims to increase taxes on consumables like wine and water,” Dr. Cassiel Ato Baah Forson, the caucus leader, argued that now was not the time to raise the prices of products and services because Ghanaians were already experiencing extreme hardship.
According to him, the government will save GH 61 billion from the debt exchange scheme for the year, and the “insignificant” GH 4 billion should be distributed to the populace as a sort of relief from the declining economy.
Yet, the majority claimed that in order to steer Ghana through its unstable economic environment and safeguard the populace’s health, additional levies had become essential.
Deputy minister of finance and the MP for Atiwa East, Abena Osei-Asare, claimed that the government placed alcohol, tobacco, and sugary foods in the schedule not just to raise money but also for health reasons.
As compared to how it is done worldwide, the government is attempting to harmonise how these items are listed on the timetable schedule, she explained.
Osei-Asare responded to assertions that the debt exchange programme would save the government around GH60 billion, saying the Minority Leader had calculated the savings incorrectly.
“We have a deficit that needs to be addressed; therefore, once we start saving money, it should lower our deficit,” she added.