There are more hidden taxes in budget – MP
Mr Sampson Tangombu Chiragia, the Member of Parliament (MP) for Navrongo Central has disclosed that the 2022 budget contains some hidden taxes likely to make life unbearable to Ghanaians.
He said, paragraph 296 of the budget states that, “All other supply of goods and services will attract the standard rate”, meaning that wholesalers and retailers paying VAT at three per cent on sales would be paying additional taxes.
These taxes he mentioned included 2.5 per cent National Health Insurance Levy, 2.5 per cent GETFund levy, one per cent COVID-19 levy as well as 12.5 per cent VAT.
Speaking in an interview with the GNA, Mr Chiragia explained that all levies were usually added back to income before the VAT rate of 12.5 per cent saying, “which means that in Ghana today enterprises that are supposed to graduate to limited liability companies pay tax more than corporate bodies”.
The MP who had worked with the Ghana Revenue Authority (GRA) for several years before entering Parliament called for a reduction in certain taxes to help enterprises to grow.
He said the E-Levy had cascading effects as its tax on income after tax should have been used for investment by companies and enterprises.
“Currently companies pay corporate tax at 25 per cent while enterprises and individuals also pay tax at the graduated rate of 5 per cent to 10 per cent, to 17.5 per cent, 25 per cent and to a higher bandwidth of 30 per cent on annual income”, he stressed.
This, he explained meant that all E-levy paid within the year becomes additional income and will be added to income before the tax.
He said with the current tax rates, if a company makes a profit of GH¢1 million, corporate tax at 25 per cent would yield GH¢250,000 while an individual with income of GH¢1 million will pay tax at a higher rate of 30 per cent of about GH¢270,000.
He said paragraph 304 of the budget also showed that all fees and charges increased by 15 per cent, which he said was unreasonable.
He said per the 15 per cent increase in fees meant that universities, Technical Universities, Training Colleges and other schools that charged fees were to go up by 15 per cent, which would bring more hardship to the people.
“Currently, the assemblies collect rates on residential and commercial property and property in paragraph 304 is likely to include movable Assets such as vehicles and even bicycles”, he said.
Mr Chiragia also expressed concern about paragraph 299, where the government removed the discount of 50 per cent on importers, meaning, prices of goods imported should go up by between 25 to 50 per cent.
Source: GNA