The government on Thursday announced the revision of the 35% tax on incomes above 10,000 Ghana cedis which was introduced in July this year.
Presenting the 2019 Budget Statement and Financial Policy to Legislators, the Finance Minister, Ken Ofori-Atta, announced that the policy has been reviewed due concerns by taxpayers – increasing the band upwards from 10,000 to 20,000 Ghana cedis and above.
“Government in the Mid-Year Review introduced an additional personal income tax band of GH¢10,000 and above per month at a rate of 35 per cent. We have listened to the feedback from the public and come to the conclusion that some relief from this tax measure is justified.
“Accordingly, Government proposes to review this band to impact monthly income above GH¢20,000 at a rate of 30 per cent...we will bring the necessary changes to this august House to be legislated,” he announced.
However, Minority Spokesperson on Finance, Cassiel Ato Forson, suggests the review has been necessitated by the criticism by the Minority.
“I am glad that the Finance Minister listened to us. We have said several times the Personal Income Tax that he recently introduced at 35% is regressive and it’s not going to help and for that matter we asked him to withdraw.
“Yes he has listened to us, and he has withdrawn that. But I want to urge the Finance Minister to listen to us more often. Because often times [for] some of the things that we say, we are not criticising because we are opposition, we are criticising because we think it is wrong. We want Ghana to prosper because if Ghana prospers we all prosper,” he said on Top Story on Joy FM.
He said the quick revision of the tax policy is a testament that it was not well thought through before it was introduced.
He maintains that good tax policies do not get reviewed few months after they have been introduced.
Giving his overall impression about the 2019 budget statement on Top Story, he told hostess, Emefa Apawu, that the fiscal document provided no hope for a better economy in the coming year.
“I am disappointed because the budget to me is empty. It is empty because the fiscal table does not support a lot of the talks,” said the National Democratic Congress (NDC) MP for Ajumako Enyan Essiam Constituency.
Commenting on the revenue targets set by the government, he said the revenue targets set by the government were unrealistic and provides the first sign of a troubled economy in 2019.
“We are aware that the revenue is not performing for the year 2018. In fact, if you are to look at the [2019 budget statement] government between Quarter-1 and Quarter-3, should have collected approximately 9.3% of GDP so far they have only collected 8.7% of GDP.
“They had projected earlier on to collect up to 12.9% of GDP by end of the year 2018 but because of what is going…it presupposes that they will not achieve the target. In nominal terms the total deviation from January to December is 2.4 billion [Ghana cedis],” he presented his analysis of the figures.
According to him, the Minister should have learned from the revenue challenges from last year give a more realistic projection for 2019.
“But they have again projected 13.1 of GDP in terms of tax revenue that they are going to get. That is overly ambitious and they can’t achieve that because it is not backed by tax policy,” he criticised.
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