[ 2014-04-25 ]

Every new tax imposes additional burden on the people - Gov't Admits
Government says it will not bend over to pressure
to abolish newly introduced Value Added Tax on
some banking services.

According to Felix Kwakye Ofosu, Deputy
Information and Media Relations Minister, the
17.5% VAT to be charged on some banking services
is to enable government raise more funds to
finance development projects in the country.

Public outcry over the policy has forced
government to defer its implementation from
January to June this year to pursue aggressive
awareness campaign.

The pressure group, Alliance for Accountable
Governance (AFAG) on Thursday demanded immediate
withdrawal of the policy which it says would
compound the woes of the people as the economy is
already in a mess. The group threatened to hit the
streets if the policy is not suspended within a
week.

But speaking on Joy FM, Mr. Kwakye Ofosu said the
regime will do more good than harm to the
country.

"...steps have been taken to deepen publication
and awareness and we believe that by the time all
of that is over, Ghanaians will buy into the new
regime and come to the conclusion that it is not
something that will harm them but it is only to
consolidate government revenue mobilisation
efforts."

Admitting implementation of the policy would lead
to additional hardship on the people, the Deputy
Minister said government has to take the decision
in the supreme interest of the country.

"Every new tax measure imposes an additional
burden unto the people [and] it is not an idea
that government is running away from, but it is
necessary to introduce this tax in order that we
are able to broaden our revenue base as we develop
our country.

"And as our needs grow, it becomes necessary to
find additional revenue...and that is what
government seeks to do" with the introduction of
the new tax regime.

Government and banks agree

In other developments, government has reached an
agreement with commercial banks for the VAT on
financial services not to be charged on salaries,
savings, deposits, investments, interests or
loans.

This forms part of the major outcomes of an
emergency meeting among the Finance Ministry,
Ghana Revenue Authority and the Ghana Association
of Bankers Thursday, on the implementation of VAT
on financial services.

Deputy Commissioner for Policy and Programmes at
the Domestic Tax Revenue Division at the GRA, Nii
Ayi Aryeetey told Joy Business the parties reached
a compromise for the tax to affect only fees or
commissions that are charged on some financial
services from June 1, 2014.

The parties also agreed to intensify the awareness
campaign ahead of the June timeline, Nii Aryeetey
stated.

Source - MyjoyOnline

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