A Senior Research Fellow of the Institute of Statistical, Social and Economic Research (ISSER), Dr. Robert Darko Osei, has said government must continuously announce tax reliefs that will enhance the growth of private businesses in the country.
About 17 tax measures have been introduced by government including tax exemption for businesses as part of commitments to reenergize the private sector and to provide relief for businesses.
Some of these taxes include the cancellation of the one percent Special Import Levy, the 17.5 percent VAT/NHIL on financial services, the 17.5 percent VAT/NHIL on selected imported medicines, that are not produced locally, abolish the 17.5 percent VAT/NHIL on domestic airline tickets, the 5 per cent VAT/NHIL on Real Estate sales, excise duty on petroleum and the reduction of the special petroleum tax rate from 17.5 per cent to 15 per cent.
Dr Osei said private sector is the highest employer in the country and it was necessary for government to offer necessary reliefs to make them continue to absorb the employment pressure.
“You cannot kill the hen that lays the golden eggs; if government should over tax private sector, we’ll get employment challenges because such high taxes make private businesses less competitive and run them out of business,” he said.
Explaining further, Dr. Osei said the cost of production and doing business in Ghana is very high and it is not because businesses want their cost to be high and be less competitive but the trend was rather due to the environment in which they operate.
Dr. Osei was speaking to the Goldstreet Business on Wednesday at the launch of a tax-benefit Microsimulation Model for Ghana, known as GHAMOD, which was developed in cooperation with the University of Ghana.
GHAMOD is based on the Ghana Living Standards Survey (GLSS) 2013, allowing for representative results on the national and sub-national levels. Policies were simulated for 2013 through 2016; based on updated household level data from 2013.
The event introduced participants to the knowledge of harnessing user-defined tax and benefit policy rules to micro-data on individuals, households and to calculate the effects of these rules on household income.
The effects of different policy scenarios on poverty, inequality and government revenues can be analysed and compared using tax-benefit microsimulation models using GHAMOD
Source: Goldstreet Business
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