Accra (Greater Accra) 06 March 2002- Mr Steve Akorli, NDC-Ho East, on Tuesday said government is finding a strategy to sway public opinion in favour of a rise in the Value Added Tax (VAT).
"Government has already made it intentions clear by indicating in the budget that other revenue sources are supposed to raise an amount equivalent to 20 per cent of the current VAT proceeds, which puts it at an expected rise of 2 and half per cent."
Mr Akorli, who was contributing to the debate on 2002 budget estimate said," in the absence of a stated source for the generation of the "other revenue', the VAT is the only likely tax item to go up"
He accused government of violating Act 592, which envisages a soft tax regime that would lead to the creation of jobs and poverty alleviation. "Now we have the ECOWAS tax, others and the withholding tax which accounts for 7.5 per cent of the turnover of companies.
According to Mr Akorli, the tax is eroding the strength of most companies thus hurting business seriously. "Fees of bonded warehouses have increased. I mean a lot more taxes have gone up and now as we already know, prices are going up because businesses are passing on the burden to the consumer."
He said Ghanaians are not being told the true state of the economy but rather, being made to believe that all is well. "For instance, they have shifted from the use of the average inflation mark for the end-of-year inflation mark. How many people know that the average inflation for 2001 was 32.9 per cent," he asked.
He said since the launch of government bond to check the escalating domestic debt, nothing has been fed to the public about the system. "We do not know the redemption plan for these security and we have no knowledge on the debt stock."
On Cocoa prices, he commended government for the upward adjustment of the prices but asked whether it could be paid if world price plummeted. He said," the new price was too low as compared to that of Togo and Cote d'Ivoire, which encourages smuggling but could we afford to pay the price when the world market price falls?"
Mr Akorli said the mass transportation system promised by the government is now the spectacle of wrecked right hand buses, which are more than 10 years old. "The buses are offending three laws. Do something about it before someone takes government to court to seek an interpretation."
Mr Akorli said the budget was fragile since about 44 per cent of expected revenue is from foreign donors. "It is precarious since any block in donor funds would let the budget suffer. He said the 16 trillion cedi revenue target for 2002 may not be achieved if the tax regime is not modified. "In 2001, instead of 13 trillion cedis, we had 11 trillion. I wonder if we can go beyond the actuals for 2001."
GRi…/
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