Kwaku Kwarteng, the chairman of the finance committee of Parliament, has declared that he would have been disappointed if the government had scrapped taxes in the 2022 Budget.
The opposition National Democratic Congress (NDC) has described the introduction of the E-Levy to tax mobile money transactions as regressive.
However, speaking on The Asaase Breakfast Show on Wednesday (24 November), Kwarteng said the impact of COVID-19 on the economy would not have allowed for the removal of any tax in the Budget.
“Let’s understand that it is politically useless for a government to say that, ‘Under this Budget I’m imposing no taxes. I am [the government is] still going to spend a lot because I love Ghanaians,’ and you put the Budget there and people clap for you. It is politically tempting …
“So, a bad politician will say, ‘I don’t want to take the political consequences. I don’t want to take criticisms of the people, so I will not implement these fiscal consolidation measures.’ So, before the Budget, I said that I will be extremely disappointed if after COVID and the fiscal situation we find ourselves, for whatever reason, removing any tax.
“Because I heard calls for the removal of some of the taxes on petroleum, and I went on the record to say I will be extremely disappointed. Because, if that were to happen, I would have assumed that the government was doing that for political motivation – to get political popularity? We can’t do that to our country,” Kwarteng said.
“Ensure tax efficiency”
He said asking the same people to pay multiple taxes over and over again could lead to fatigue and provoke a movement towards mass tax evasion, and advised the government to ensure tax efficiency.
Professor Quartey said critical assessment of taxes is needed to ascertain whether they are efficient means of raising revenue, rather than a “nuisance” that stifles private business.