The Industrial and Commercial Workers Union ( ICU) has stated that it may go to court to compel government to reduce a 27 percent tax imposed on petroleum products this year.
In January this year, government announced a 27 percent tax increase on petroleum products, resulting in petrol selling for 16 cedis a gallon from about 9 cedis a gallon.
At the time; labour, political parties and some civil society groups pressed on government to reduce the tax after parliament disclosed that it only approved a 5 percent increment.
Labour further argued that the tax hike has affected the private sector, leading to loss of jobs.
Speaking to Citi Business News at a forum organized to educate members of ICU on the issue, the General Secretary of the union, Mr. Solomon Kotei stated that plans are underway to meet parliament, after which the leadership will go to court to reverse the imposition of the tax.
“We will get back to the Speaker of Parliament to notify him on the issue. If it was an error it will be addressed because we were told parliament gave government the authority to increase it by only 5 percent”, he said.
Mr. Kotei stated that the imposition of the tax was having an adverse effect on workers since Ghanaians are already paying high income tax and corporate tax.
“After we see the Speaker we may go to court to compel government to revise the tax. Workers are already paying huge taxes and it has affected their ability to recapitalize”, he stressed.
ICU seeks tax relief
Members of the union also appealed to government to grant them some tax relief to save their businesses from collapse.
According to them, the hash economic conditions of 2015 have had an adverse effect on their operations, cutting down their ability to recapitalize.
Justifying the need for a tax holiday, Mr. Kotei pointed out that the impact of the instability of the economy, as well as high taxes has eroded the real income of players in the private sector.
He stated that assessments conducted by the union indicate a decline in reinvestment, affecting business expansion.
“The impact of the taxes is the reduction we see in our net salaries. If the 30 percent and the 35 percent taxes that employers and employees are paying is reduced, it will reflect in recapitalization, and will enhance the growth of businesses in the country,” he said.
Recommendations on tax relief
Touching on some recommendations made by the union on Ghana’s tax regime, a Tax Expert, Mr. Abdallah Ali-Nakyea stated that considerations must be given to personal reliefs which have not seen any review since 2013.
In addition, Mr. Ali-Nakyea advocated for a removal of taxation on allowances since it defeats the purpose for which it was set up.
He also urged government to undertake a comprehensive review of Ghana’s tax system to remove unnecessary levies that inhibit the private and informal sector from growing.
By: Lawrence Segbefia /citibusinessnews.com/Ghana