Debate over ‘sacred’ VAT healthy – Gabby

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A leading figure in the New Patriotic Party (NPP), Gabby Asare Otchere-Darko, has questioned the seeming sacredness of the Value Added Tax.

He also described the recent public debate over the VAT as healthy.

“I understand Ghana is hot over a question I raised whether the Government should consider raising VAT as an option to meeting essential spending targets? I find it extremely healthy and constructive even if it has led to hasty conclusions,” he said in a post on Facebook.

Mr. Otchere-Darko acknowledged that Ghanaians already had reason to be sceptical about the rumoured increased.

“The Ghanaian people are not convinced that the taxes they pay are usually used efficiently for their benefit,” he observed.

The VAT introduction in 1995 witnessed series of protests by then political groupings of the day, led by now-President Akufo-Addo, Charles Wereko-Brobby and Kwaku Baako Jnr among others; culminating in the massive Kumi Preko demonstration.

Subsequent attempts at raising VAT, like the recent speculations, have all been met with stiff public opposition.

The renewed public scrutiny of the VAT follows a report by a pro-NPP newspaper, The New Statesman, suggested that government may announce an increase in the VAT and the National Insurance Levy in the Mid-Year Budget Review.

The report suggested that VAT and NHIL may be increased from 17.5 percent to 21.5 percent.

Find below his full post

I understand Ghana is hot over a question I raised whether the Government should consider raising VAT as an option to meeting essential spending targets? I find it extremely healthy and constructive even if it has led to hasty conclusions. What I gather from the debate is pretty clear. The Ghanaian people are not convinced that the taxes they pay are USUALLY used efficiently for their benefit. So to even consider asking them to pay more (as was usually, consistently the case under the NDC), they want to know about four basic things: (1) What are you doing about cutting down wasteful expenditure? (2) What have you done differently since 2017 with the taxes YOU (the Akufo-Addo government) collected? (3) Can you look at other options of raising revenue without touching VAT? (4) The leakages are too much and deep. Can you do more to collect from those who are evading taxes? The good news is that, if what we hear took place in Cabinet last Thursday is anything to go by, the President and his Cabinet are pretty much with them on all three. If there are bullets to be bitten, let those who pull the trigger be seen to be biting more. But, is VAT such a sacred cow and if so since when? Exciting times ahead.
~ Gabby Asare Otchere-Darko

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