The President, Nana Addo Dankwa Akufo-Addo, has summoned his Cabinet to an emergency meeting on Tuesday, July 17, 2018, over the concerns on possible tax increases in the next budget review.
The meeting comes ahead of the decision by the Finance Minister, Ken Ofori Atta, who is likely to present the Mid-Year Review on July 19, 2018.
This often allows the Finance Minister the opportunity to review the targets on the following:
- A brief overview of recent Macroeconomic Developments of Governments
- Update of Macroeconomic forecast undertaken by the government
- Analysis of total revenue and expenditure and performance for the first 6 months of this year
- Also where necessary, revise the Medium Term Budget outlook the budget outlook and Expenditure framework.
PrimeNewGhana’s source says the meeting will look at options for raising additional revenue to fund the many social policy interventions rolled out by the government instead of the tax.
It says there will be only one item on the agenda, which is a proposal by the Economic Management Team to boost revenue.
There have been speculations that government might increase the VAT rate from the current 17.5% to 21% as the Finance Minister, Ken Ofori-Attah prepares to update Parliament on the performance of the economy in the past half year on Thursday.
President Akufo-Addo has not made a firm decision yet on the controversial issue of increasing VAT because of his own concerns about its implications on most Ghanaians.
Already, the leadership of the Industrial and Commercial Workers Union (ICU) has joined other labour unions to kick against the proposed extra 1% levy on Value Added Tax for the National Health Insurance Scheme (NHIS).
Government is seeking to increase the 2.5% NHIS levy on VAT to 3.5%, which is set to be announced in the mid-year review budget.
But General Secretary of the ICU, Solomon Kotei said managers of the scheme should be transparent and disclose the amount accrued so far under the scheme, as well as how some funds have been misappropriated since the inception of the scheme.
“If what has been contributed already has not been accounted for, how should we be compelled to come and pay another one? Then again, the indirect taxes we pay apart from the VAT, you see NHIA on every product you buy in this country, and we have not been told how much that is contributing”, Mr. Kotei added.
Currently, unionized bodies such as the Ghana National Association of Teachers (GNAT) and the Civil and Local Government Staff Association (CLOGSAG) have also not agreed to the one percent levy.