Minister of Finance Ken Ofori-Atta has emphatically told Parliament that there will not be any increase in Value Added Tax (VAT) contrary to speculations.
The past few days have seen the media reporting that the government intends to increase VAT from 17.5% to 21.5%, after Gabby Asare Otchere-Darko, nephew to President Nana Akufo-Addo, raised the issue on his Facebook wall to gauge public reaction.
His comments generated huge public backlash with several groups including, Spare parts dealers, drivers serving notice to embark on a massive demonstration should VAT be increased.
The Minority in Parliament and the main opposition National Democratic Congress who also bought into the speculation indicated their resolve to resist any such increase.
According to sources, the sole agenda of that crunch meeting was the proposal by the Economic Management Team led by Vice President Dr. Mahamudu Bawumia to boost revenue.
But presenting the Budget Mid-Year Review in Parliament on Thursday July 19, 2018 Mr Ofori-Atta stated in plain terms that there will not be any increase in VAT and urged the opposition to “stop taking directions on economic policies from social media”.
“Mr Speaker, last year we abolished numerous taxes. The scale of tax reductions had never been implemented in the 60 years of Ghana’s economic history since independence. The evidence shows that the economy has responded positively to these tax cuts. What is also clear to us Mr Speaker is that we are not collecting as much as we should.
“The solution to this problem, however, is not necessarily, imposition of many taxes, we must first make sure that we ensure compliance with existing tax laws, plug the leakages in the existing system, ensure value-for-money for the expenditures that government undertakes and ensure Mr Speaker, that the wealthy also pay their fair share. Me Speaker, any taxes should be to elicit socially desirable outcomes such as a better environment in this regard.
“I’ll like to inform the house Mr Speaker that there will be no increase in VAT”, Mr Ofori-Atta emphasized.
