The Vice-President of the Institute of Chartered Accountants, Ghana (ICAG), Professor Bosnia Omane Antwi, has said that merely increasing taxes is not an answer to the poor revenue mobilisation drive in the country.<\/p>\n
Speaking to the GRAPHIC BUSINESS on May 12 2014, he particularly described the government\u2019s recent introduction of 17.5 per cent Value Added Tax (VAT) on bank transactions as a mere knee-jerk reaction to solving the financial challenges facing the country.<\/p>\n
\u201cMy advice is that it should be scrapped because it will not bring so much to the country. An excessive tax rate does not help anybody; rather such increases will help people to evade taxes the more,\u201d he said.<\/p>\n
The introduction of the 17.5 per cent VAT levy on some financial services rendered by commercial banks in a bid to boost revenue has placed Ghana among a list of countries in the world which charge VAT on financial services.<\/p>\n
Prof. Omane Antwi described the action as one that was not discussed with the banks and other relevant stakeholders and added that it was only after the announcement that the Ministry of Finance and the banks are rushing to discuss the consequences.<\/p>\n
The government slapped a 17.5 per cent Value Added Tax (VAT) levy on some financial services rendered by commercial banks in a bid to boost revenue and keep its fiscal stabilisation plans on track.<\/p>\n
The levy is also part of the expansion of the scope of taxes under the VAT Amendment Law, which was passed in November 2013 and which raised tax rates, including the National Health Insurance Levy, from 15 per cent to 17.5 per cent.<\/p>\n
According to the amended law, \u2018financial services\u2019 means provision of insurance; transfer, receipt of, or dealing with money, whether in domestic or foreign currency or any note or order of payment of money; provision of credit; or operation of a bank account or an account of a similar institution.<\/p>\n
Prof. Antwi also said Ghanaians were not happy taxpayers because tax payment had not become part of their civic responsibilities.<\/p>\n
\u201cMany people believe that when they pay taxes to the state, the government will mismanage the money. However, when taxes are paid and the public can see that these taxes are being used to improve infrastructure, for instance, then people will be happy to honour their tax obligations,\u201d he said.<\/p>\n
He added that in South Africa, United States of America and Europe, people line up to file their taxes because it has become part and parcel of them.<\/p>\n
Prof. Antwi advised that instead of increasing taxes and the tax rates, the government should make taxes something that the citizenry would be proud of and happy to pay.<\/p>\n
He said once this was done and there were controls in place to ensure their judicious use, the little that would be collected could do the work and people would see that they had value for money and would be motivated to pay more.<\/p>\n
According to him, financial intermediation in the country was low and, therefore, when taxes are put on certain banking transactions, it will be difficult to woo the unbanked and many people will also do business outside the bank.<\/p>\n
<\/p>\n
Source: Daily Graphic<\/p>\n","protected":false},"excerpt":{"rendered":"
The Vice-President of the Institute of Chartered Accountants, Ghana (ICAG), Professor Bosnia Omane Antwi, has said that merely increasing taxes is not an answer to the poor revenue mobilisation drive in the country. Speaking to the GRAPHIC BUSINESS on May 12 2014, he particularly described the government\u2019s recent introduction of 17.5 per cent Value Added […]<\/p>\n","protected":false},"author":14,"featured_media":9486,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[],"tags":[489,21,4],"yoast_head":"\n