Ghana Business News-With Ghana losing over US$ 4.9 billion as a result of tax evasion, from 1970 to date, the New Patriotic Party (NPP) Government, being resolute in fight against corruption, Finance Minister, Ken Ofori Atta has reiterated commitment to prosecute individuals and corporate institutions that would be found culpable in issues relating to tax evasion.
Over the years, it has become evidenced that many sectors which are fraught with issues of tax evasion, are fronted by opaque ownership structures, making it difficult to detect companies that evade tax or have inappropriate relations with government officials.
It is estimated that developing countries, such as Ghana, lose $1 trillion each year due to corrupt or illegal cross-border deals, many of which involves companies with unclear ownerships.
With this, the Finance Minister, as part of efforts to improve revenue performance, has hinted commitment by government to intensify tax compliances, and as well plug existing revenue leakages.
At the 2018 budget review in parliament yesterday, Mr. Ken Ofori Atta explained that investigations undertaken by his government had shown inbound leakages on goods arriving in the country, significant outstanding tax debts, suspense regimes in the area of warehousing, transit trade, free zones, tax audit issues such as limited coverage, low auditor productivity, and low audit yields.
‘’Mr. Speaker, we are rolling out major initiatives to address these tax compliance issues. Mr. Speaker these initiatives will include prosecutions of tax evaders and corrupt tax officials, a special VAT Attack force to ensure enforcement and deepen VAT penetration from the current low levels of 11 percent, and institutional reforms at GRA’’, he noted.
The minister, in his speech also blamed external factors for the increasing depreciation of the cedi.
According to him ‘’ In spite of all the strong fundamentals, we have seen the cedi come under pressure. This is primarily due to external pressures. In spite of the challenges, we have put the right measures in places to make sure that we have a robust economy. The cumulative rate of depreciation of the cedi from January to June 2018 is 2.4% as against 17.2% in 2012.”
He also stated that the VAT rate will still remain 12.5 per cent and the National Health Insurance Levy (NHIL) will also remain 2.5 per cent, likewise the GetFund levy.
In his speech on the floor of Parliament, Mr. Ofori-Atta admonished Members of Parliament (MPs), especially those from the Minority to source economic information from the right places.
“I’ll also like to advise my friends to stop taking policy directive on economic policies on social media,” he admonished.
A leading member of the New Patriotic Party (NPP) had stated in a suggestive post on Facebook (Social Media) that VAT and the NHIL may be increased to 21.5% in the mid-year budget review.
The Facebook post, had since sparked controversy among the public as to the reasons why VAT and NHIL must be increased.
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