A regular news commentator on Melody FM in Takoradi, Jon Hayfron Benjamin has said the current tax schemes being proposed by the Akufo Addo government would reap more revenue for the country contrary to views by skeptics.
Mr John Benjamin explained to Melody News’ Joe Bright that many more people could be paying taxes from the current design.
“If you read economics, there is some we call elasticity of taxation. You can reduce taxes and there could be greater inflows than before because the import is that monies should be freed and if people are bringing in 10, they would bring in 15 or 16. So that compensate for the reduction in tax…government may even be reaping more than the higher tax rates.” Mr Benjamin said; furthermore, “more business means more money and many more people could be paying taxes and government revenue would increase.”
Jon Benjamin again said “we just have to synchronize….do you think government is not wise? Government is wise enough to say I am reducing tax and they know the import of it. They want a liberalized economy and free the people from economic burden”
During the reading of the budget statement on Thursday, 2 March, Minister of Finance,Mr Ken Ofori-Atta, mentioned, among other things, the scrapping of excise duty on petroleum products. The government also intends to reduce the special petroleum tax rate on petrol from 17.5% to 15%. Others are:
1. The 1% special import levy
2. The 17.5% VAT on financial services
3. The 17.5% VAT on selected imported medicines not produced locally
4. The 17.5% VAT on domestic airline tickets
5. The 5% VAT on real estate sales
6. Duty on importation of spare parts
Also, the 17.5% VAT imposed on traders has been replaced with a 3% flat rate, while businesses that employ young graduates from tertiary institutions will get tax credits and other incentives. Furthermore, there will be tax incentives for young entrepreneurs while the Corporate Income Tax will be progressively reduced from 25% to 20% in 2018. Mr Ofori-Atta said the Akufo-Addo government would initiate steps to remove import duties on raw materials and machinery for production.