It is unwise to reduce current vat rate - official
SSNIT is financially sound to continue pension scheme - DG
Bolgatanga (Upper East) 06 November 2000
The Head of Training and Development of the Value Added Tax (VAT) Service, Mr Ackah Mensah, on Friday dismissed suggestions for a reduction of the current vat rate of 12.5 per cent.
He explained that at the present rate, VAT has made it possible for income and corporate taxes to be drastically reduced and this could help improve the economy in due course.
Mr Mensah was speaking to the Ghana News Agency at Bolgatanga in reaction to a media report attributed to Dr Edward Mahama, flag bearer of the People's National Convention, criticising the present rate.
The presidential aspirant was reported to have said that if voted into power, his government would reduce the present VAT rate to about eight per cent to minimise the burden on Ghanaians.
Mr Mensah said compared to other countries charging VAT, Ghana's rate is low and any attempt to reduce it further could only erode the positive impact it is making on the economy.
He said the lowest VAT rate charged in Asia is 20 per cent, adding that Japan, which is among the lowest, is considering increasing her rate.
Mr Ackah said the argument that Nigeria has a VAT rate of five per cent, and therefore Ghana can successfully reduce its rate, "is an academic exercise pursued by politicians who are only interested in scoring political goals.
"To reduce VAT rate is practically impossible because any attempt to do that means dragging the economic advancement of this country backwards" he said.
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Accra (Greater Accra) 06 November 2000
Mr Charles K Asare, Director General of SSNIT, on Friday assured all pensioners that the Pension Scheme is financially sound to continue to pay their entitlements.
"The scheme is sufficiently resourced to deliver the benefits far into the future," Mr Asare said.
Addressing the closing ceremony of the first quadrennial delegates Conference of the SSNIT Pensioners Association in Accra, Mr Asare admitted that there are some challenges in the investment areas of the scheme but this has been blown out of proportion by a section of the media.
He said, "we ourselves are fully aware of those investments which have under performed and have initiated measures either to divest our interest or restructure them for improved performance."
Mr Asare mentioned in particular the manufacturing sector, which has under performed mainly due to the current economic difficulties of the country. However, the financial sector is performing.
"It is in the light of these developments that we assure all our stakeholders that management is in control of the fund."
Mr Asare said the Trust has started negotiation with the Banks and from next year will absorb bank charges imposed on pensioners' monthly salary.
Mr Kwame Adu Amankwa Secretary General of the Trades Union Congress, in a speech read for him, said a proposal for review of the SSNIT Law has been submitted to the government.
The proposal called on the government to reduce its representation on the SSNIT Board and increase workers representation.
It also called for the review of the student loan scheme and the formula for the calculation of old age grants.
Mr Adu Amankwa said TUC would follow developments of the SSNIT investigation and will react accordingly.
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