Ahead of the 2021 budget presentation, Ghanaians should be open to the possibility of the introduction of new taxes or an increase in some existing taxes. That’s according to a tax analyst, Timore Francis Boi.
Steps taken by government to deal with the impact of COVID-19 on businesses and individuals have seen government’s expenditure ballooning, pushing the country’s total public debt stock at the end of 2020 to GH¢286.9 billion, representing 74.4% of GDP. This has led to calls for innovative ways of raising more revenue for government.
Speaking to Citi Business News on the possibility of new taxes in the 2021 budget, Francis Timore Boi, said the possibility of taxes such as the Communication service tax which was reduced from 9% to 5% last year, as an additional measure to alleviate the hardships caused by the COVID-19 pandemic, could be increased again.
“If I see new taxes I won’t be surprised because the options are very limited. If I see a marginal increase in VAT I won’t be surprised. Though the Ghanaian populace may not be happy with it, we essentially don’t have a choice. We need to pay for the expenses. Even if we don’t see it now, we should expect something around the mid-year budget.”
“The CST was reduced from 9% to 5%. If you look at the reasons for increasing it from the previous 6% to 9%, the reasons have not changed. We brought it to 5% because of COVID-19 and its impact on Ghanaians. So we are likely to see the CST going to 9%. If it remains then we’ll be happy with it, but looking at the difficult situation government finds itself in, we think that there may be some new taxes,” he added.
Reduction of ‘talk tax’ from 9% to 5% takes effect from September 15
Mobile subscribers and data users started enjoying the reduction in the Communication Service Tax from Tuesday, September 15, 2020, after it was increased to 9% earlier.
In a statement to confirm the implementation of the new tariff, the Chief Executive Officer of the Ghana Chamber of Telecommunications, Ken Ashigbey, said, “The tariff adjustment programme means when our customers pay the same price they would enjoy more, which is in line with the government’s measures in alleviating cost burden on citizens in the wake of the global pandemic.”
The statement added that, “Mobile Network Operators will notify their customers on the completion of the modification exercise and provide further transparency on the adjusted tariffs of their products and services while offering other relevant information post usage of these services.”