Prof Godfred A. Bokpin, an economist and professor of finance, believes that the government’s frequent application of taxes is a sloppy technique for income collection, putting financial hardship on residents.
During an interview on JoyNews’ Newsfile, he emphasized on the premise that, while the necessity for greater money to help the economy is accepted, the unpredictability and frequency with which new taxes are introduced place a burden on Ghanaians.
“This is state-sponsored robbery. This is robbery that leaves the citizens financially repressed. It should not be accepted. I think in Ghana, we have allowed too many wrongs in this country,” he noted.
Professor Godfred A. Bokpin underlined the importance of pursuing more effective income generating approaches that do not endanger households’ ability to meet their basic requirements or the private sector’s ability to remain competitive.
“Nobody can tell us that the only way out is to impose more taxes and taxes, as we have done. The more we impose taxes, the real effect in scaling up or our tax revenue to GDP ratio is not seen,” he said.
“This is a small open economy. We have more than 27 different tax handles. That is not the only thing. If since 2020 the taxes we have imposed, if you estimate the compliance cost to the taxpayer, it’s huge, configuring systems virtually every six months, there is no predictability,” Prof Bokpin said.
He emphasized the need of the government putting more effort into earning income for the benefit of the people it intends to help in the economic development process.
“Are we not building it (economy) for Ghanaians? Are we not building it for Ghanaian private-sector businesses? What happens if by the time we achieve macroeconomic stability, half of Ghanaians have gone into poverty and have no way of reversing that? What economy is that? At the centre of it all are people and businesses.”
“The banking sector spends millions of dollars to configure their system to allow the charging of E levy. Check the manufacturing sector, they pay so much and disruption to their production line just to fix their tax stamp or something. Virtually every six months, there’s some level of disruption to planning, and to the production process. My considered view is that what Ghana is doing is not taxation,” he added.
In January 2024, the government directed the Ghana Revenue Authority (GRA) to work with two power distribution firms to transmit Value Added Tax (VAT) received from users who exceeded their lifeline electricity usage. In a press release, Finance Minister Ken Ofori-Atta directed the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCO) to work with GRA to implement VAT on households that exceed the specified maximum consumption level for lifeline unit block charges, beginning January 1, 2024.
However, on January 19, Dr. Yaw Baah, Secretary-General of the Trades Union Congress (TUC), announced his disagreement, claiming that labor cannot tolerate the imposition of a 15% Value Added Tax on lifeline power customers, which he considers damaging to worker welfare.
Dr. Baah questioned the government’s choice to impose this new tax on already struggling workers under existing problems.
“This country called Ghana, and all the resources we have, now the government doesn’t see anywhere else to tax; they are taxing our electricity also. Tomorrow they will tax our water, and we are not going to sit down for that to continue. That’s why I’m saying you are going to have a baptism of fire; we need to fight it until this thing is cancelled,” Dr Baah said.