Raise Corporate Tax to 35% – Azeem to gov’t

By Lorlornyofm November 14, 2017 08:11

Raise Corporate Tax to 35% – Azeem to gov’t

The Director of the Centre for Budget Advocacy Ghana, Vitus Azeem, believes the Akufo-Addo administration’s aim to make Ghana self-sufficient will be better served by increasing corporate tax significantly.

Speaking on Eyewitness News, Mr. Azeem proposed an increase to 35 percent, instead of the expected decrease to 20 percent, as indicated by the government.

The Corporate Tax Rate in Ghana currently stands at 25 percent, and has been in the same range for the past decade.

It hit as high 32.50 percent in 2004, before dropping to 30 percent in 2005, before steadying at 25 percent in subsequent years.

But Mr. Azeem is adamant that the government needs to “send the Corporate Tax back to 35 percent; the rate at which it was in the 1990s or at least up to 30 percent. That will make sure that people who are making money will pay” he argued.

He stated further that “bringing the corporate tax down to 20 percent is actually going to damage our [revenue] mobilization efforts.”

Mr. Azeem also allayed fears that struggling businesses would be burdened specifically because the corporate tax is a tax based on a company’s profits declared in audited accounts.

“It is the businesses that are making profits that will be affected and income tax is graduated. So depending on how much income you are earning, you will pay 30 percent based on that.”

Spreading tax net

Mr. Azeem urged the government to spread its tax net instead of exempting more people from paying income tax.

“One example I have been very much against is private universities. Can you imagine somebody saying that corporate tax on private universities is a nuisance tax because they are contributing to the development of the country?”

“The driver who drives a government car takes a salary of less than GHc 100 and is taxed. A nurse and doctor who save lives are taxed. They are contributing to the development of a country. So if a private university is making profits, why should it be exempted them from tax,” Mr. Azeem argued.

NPP’s tax cuts

As a campaign promise, the New Patriotic Party (NPP) indicated that its management of the economy would see a shift in policy from taxation to production to relieve the burden on the private sector and boost production.

To realize this shift from taxation to production, the NPP targeted the removal or slashing of some taxes, some of which have already been executed.

Abolished taxes

– 1 percent Special Import Levy;

– 17.5 percent VAT/NHIL on financial services;

– 17.5 percent VAT/NHIL on selected imported medicines, that are not produced locally;

– Initiate steps to remove import duties on raw materials and machinery for production within the context of the ECOWAS Common External Tariff (CET) Protocol;

– 17.5 percent VAT/NHIL on domestic airline tickets;

– 5 percent VAT/NHIL on Real Estate sales;

– Excise duty on petroleum;

– Special petroleum tax rate from 17.5 percent to 15 percent;

– Duty on the importation of spare parts;

– Levies imposed on kayayei by local authorities;

– Taxation, the gains from realisation of securities listed on the Ghana Stock Exchange or publicly held securities approved by the Securities and Exchange Commission (SEC);

Reviewed taxes

– Reduce National Electrification Scheme Levy from 5 percent to 3 percent;

– Reduce Public Lighting Levy from 5 percent to 2 percent;

– Replace the 17.5 VAT/NHIL rate with a flat rate of 3 percent for traders; and

– Implement tax credits and other incentives for businesses that hire young graduates.

By: Delali Adogla-Bessa/citifmonline.com/Ghana

By Lorlornyofm November 14, 2017 08:11
Write a comment

No Comments

No Comments Yet!

Let me tell You a sad story ! There are no comments yet, but You can be first one to comment this article.

Write a comment
View comments

Write a comment

Your e-mail address will not be published.
Required fields are marked*