“Let’s share the burden” – Ofori-Atta justifies new taxes

On March 25, 2021, 1:02 PM

Finance Minister-designate, Ken Ofori-Atta, has justified the need to introduce new taxes at a time Ghanaians are coping with the negative impact of the novel coronavirus.

Responding to a question from Parliament’s Appointments Committee on Thursday, Mr Ofori-Atta said it was necessary for Ghanaians to learn to share the burden.

“I think the question of taxes can be an independent question. We have proposed a number of taxes that would affect petroleum which will lead to revenue for the Energy sector.

“We also have a huge sanitation problem and I think that is a health hazard for the days. We are moving forward and there is a battle cry for us to join hands towards growth and transformation.

“We need to create a society that we share the opportunities as we grow and also be able to share the burden,” he said referring to the “ WƆN YA WƆ HIƐƐ ” budget which the government has designed for consolidation, completion and continuation.

In his very first comment on the 2021 budget, he said the budget would propel Ghana into recovery with the new taxes and other programmes outlined to generate funds.

The government is seeking parliamentary approval for GHȻ 111.3 billion as total expenditures while expecting total revenues and grants of GHȻ 72.1 billion for the year.

The expenditure for 2021 is also 13 per cent higher than the GHȻ 98.1 billion approved by parliament for 2020.

The budget was dominated by taxes and levies meant to shore up revenue for 2021 considering the adverse impact of the pandemic.

At least six taxes are on the table for parliamentary approval which includes:

Energy Sector Recovery Levy of 20 pesewas per litre on petrol/diesel under
Sanitation and Pollution Levy (SPL) of 10 pesewas
COVID-19 levy of 1% on National Health Insurance Levy (NHIL)
COVID-19 tax of 1% on VAT
Financial sector clean-up levy of 5% on profit-before-tax of banks
Road tolls review
Gaming tax

What did Mr Ofori Atta say?

He said the country had issues with sanitation and the Delta Fund for energy, so the petroleum taxes are supposed to solve that.

He was speaking during an online Post Budget Forum organised by PricewaterhouseCoopers on the 2021 Budget.

On the COVID-19 levies, Mr Ofori-Atta pointed out that it would ensure that the government is “able to pay for vaccines and get our people working so we don’t have lockdowns”.

It would help the government to complete its Agenda 111 “so that our infrastructure for health care would be robust”.

Agenda 111, under President Akufo-Addo, would see the construction of 100-bed district hospitals and some regional hospitals across the country.

He said it was time for banks to help especially after the financial sector clean-up.

The government said GHC 21billion was spent in executing the exercise.

After streamlining activities in the sector, the minister believes they should pay back since the “responsibility is not only for the government but for all Ghanaians”.

Mr Ofori-Atta wants Ghanaians to embrace a collective responsibility to revive the economy “as a shared burden philosophy” moving forward.

He said it was an incredible period of renewal where “we as Ghanaians must fight to get the economy back to where it was or where it should be”.