The Ghana Federation of Labour has expressed reservations about the government’s newly proposed taxes outlined in the 2021 Budget Statement and Economic Policy.
The government, through the caretaker Minister for Finance, Osei Kyei-Mensah-Bonsu in delivering the 2021 budget announced the government’s proposal of introducing six new taxes.
These taxes include a COVID-19 Health Levy; 1% increase in National Health Insurance Levy and 1% increase in flat VAT rate as well as a 30 pesewas increase in fuel prices to take care of excess power capacity charges [20 pesewas] and Sanitation and Pollution Levy [10%].
The Federation in a statement signed by its Secretary-General, Abraham Koomson said the new taxes will “affect the living standards of workers.”
It has therefore asked the Minister of Finance to convene an emergency Tripartite Committee meeting to address the fallout of the approved budget.
Apart from the Ghana Federation of Labour, the Association of Ghana Industries (AGI) has expressed concerns over these taxes.
The AGI fears these taxes may have a huge toll on the business community particularly at a time when players are reeling from the devastating effects of the COVID-19 pandemic.
Speaking at Citi TV/UPSA’s post-budget analysis programme at the University of Professional Studies, Accra (UPSA) held on Thursday, the AGI’s representative on the panel, Adobea Asiama-Aboagye, said it will be prudent if government reconsiders the imposition of the taxes to help in the sustainability of business operations.
The President’s Representative at the Finance Ministry, Charles Adu Boahen has however justified the proposal for the new taxes, saying the move is to sustain the debts incurred by the government through the various COVID-19 interventions initiated by the Presidency.
He said the only way Ghana will not be caught in a debt trap following shortfalls in revenues is to introduce such taxes to ameliorate the situation.