Tax attorney and Director of EM Tax Advisors Ltd, Fred Kwashie Awuttey, has cast doubt on the long-term viability of tax cut pledges made by Ghana’s two major political parties ahead of the December 7 elections.
Speaking during the NorvanReports, Economic Governance Platform, and BudgIT Ghana X Space discussion on the Topic “Tax Cuts: Liveline For the Average Ghanaian Or Political Sweet Talk?”, Mr Awuttey cautioned that while Ghanaians may experience short-term relief, the likelihood of future tax hikes remains high.
Citing the ruling New Patriotic Party’s (NPP) record of initially scrapping 15 taxes in its first year but subsequently introducing 27 new ones over the past seven years, Mr Awuttey suggested a similar pattern could emerge regardless of which party assumes power.
“The question is do we need this at this time, when we are struggling to raise revenue. If you look at the manifestoes of both parties there is a competition to reduce or remove taxes, but what is the cost of doing that to the current revenue. If you remove these taxes, what will be the substitutes and how are you going to fund Government expenditure? He quizzed noting that both the NPP and the opposition National Democratic Congress (NDC) are engaged in a political competition to promise tax reductions.
“So then what that means is that you have to find ways to substitute them and that imply that we are likely to have future taxes to come on board. So possibly we have a short term reduction in the taxes or a waiver but we are going to have more taxes reintroduced, just like we have seen, that about 15 taxes were removed by the current Government, and about 27 taxes have been reintroduced,” he quipped.
Mr Awuttey pointed to the e-levy and COVID-19 levy, which are expected to generate around GHS 7.7 billion by 2025, as critical revenue streams that neither party has convincingly explained how they will replace.
Speaking further during the X Space Discussion, he critiqued the tax amnesty proposal in the NPP’s manifesto, describing it as vague and lacking the detail necessary to reassure taxpayers.
Furthermore, Mr Awuttey expressed reservations about proposed investment tax credits, suggesting that existing incentives such as accelerated depreciation and capital allowances already address many of the concerns these policies are designed to tackle.
In his view, the manifestos fail to offer a clear and coherent strategy for ensuring fiscal sustainability, leaving Ghana at risk of future fiscal instability.
Source:norvanreports.com