Former President John Dramani Mahama has criticized the Nana Addo government over its attempt to increase VAT and National Health Insurance Levy (NHIL), in the Mid-Year Budget Review scheduled for Thursday, July 19, 2018.
In a tweet, Mr. Mahama said “The Ghanaian business sector has never experienced such difficult times in the history of the 4th Republic. Akufo-Addo’s proposed new taxes would cripple businesses further and also defeat his much-touted mantra of from taxation to production.”
A report by a pro-NPP newspaper, The New Statesman, suggests that government may announce an increase in the Value Added Tax, [VAT] and the National Insurance Levy, [NHIL] in the Mid-Year Budget Review.
The report suggested that VAT and NHIL may be increased from 17.5 percent to 21.5 percent.
The speculations have caused anxiety among the public as some observers say it will burden Ghanaians.
Tax Analyst with Ali Nakyea and Associates, William Demitia, has also warned that any attempt to increase VAT and the NHIL could see the prices of basic things such as sachet water, popularly called pure water go up.
According to him, NHIL and VAT are consumption base taxes that affect almost all items sold in the market.
Mr. Demitia warned that the general prices of goods and services will go up, making the ordinary person worse off.
He explained further that “unless government says that the supply of water is exempt from VAT, then we are going to pay more for even water”.
He added that increasing NHIL and VAT could negatively impact on the prices of imported goods.
But the CEO of the Ghana Investment Promotion Center, Yofi Grant, has urged Ghanaians to embrace any increase in taxes since government will provide social interventions to cushion the ordinary Ghanaian.
“Everybody needs to pay tax, we should get that mindset. The lower the tax, the happier we are, but there is a bigger structural anomaly in that which is that there is a small proportion of the business population paying the larger proportion of the tax,” he explained.