Ahead of the 2018 Mid-Year Budget Review, the Minority has predicted the government will increase taxes to fund its revenue-demanding policies.
According to the Minority Legislators, the populist policies were introduced and trumpeted in the lead up to the 2016 elections to bring the then opposition New Patriotic Party (NPP) to power.
Former Deputy Finance Minister, Cassiel Ato Forson, told the host of Joy FM’s Super Morning Show Thursday that he expects a review of at least three existing taxes and a possible introduction of two new taxes.
Prior to today’s mid-year budget review, there were speculations that there would be a 4% hike in Value Added Tax (VAT) from 17.5% to 21.5%, but government, sources say, decided to freeze the proposals after a marathon Cabinet meeting to respond to concerns from industry players.
However, Mr Forson is convinced government will stealthily introduce new taxes to fund its politically-motivated policies and mammoth public sector wage worsened by the employment of at least 110 ministers and their deputies.
He makes the following predictions in Mr Ofori-Atta’s presentation to Parliament later Thursday morning:
– A Minimum corporate income tax
The former Deputy Finance Minister is not certain the rate government will charge private institutions when it is announced but he provides the following justification for his prediction:
Already in Parliament, before we approved the [Anglogold Ashanti] deal, this government brought us a letter from the office of the President saying that they are going to introduce a minimum corporate income tax and so AngloGold Ashanti should be exempted from this tax for seven years.
– A tax on luxury vehicles
Again the former Deputy Minister is not certain how much the tax rate would be charged on vehicles with engine capacities exceeding 3 litres (3L).
– Upward review of Communication Service Tax (CST)
– Upward review of the National Health Insurance Levy (NHIL) (currently 2.5%) by up to 2 percentage points.
– Upward review of the Ghana Education Trust Fund (GETFund)
Per the law, the Public Financial Management Act, the Finance Minister is required not later than July 31 of each financial year to update parliament on some critical developments on the economy. This includes Macro-economic numbers, how revenue and expenditure fared over the first six months of the year as well as the outlook for the rest of the year.
There is also an avenue for Supplementary Budget if the need be.