Ghanaians are suffering – Council of State

Members of the Council of State have told the President in plain language about the economic hardship and suffering Ghanaian are going through due to bad policies of government.
A source revealed that members of the Council of State on Monday held closed-door meeting with President Nana Addo Dankwa Akufo-Addo on the high rate of duties, levies and taxes on imported goods at Ghana’s ports of entry and the large volumes of tax exemptions and the hardship it has brought on businesses and individuals.
The Council members also expressed worry about the unprecedented poverty levels in the country even though government continue to trumpet achievements of macroeconomic indicators yet the citizenry are suffering.
Individuals and groups, including the Ghana Union of Traders Associations (GUTA), civil society groups, civil servants, farmers, drivers and market women continue to complain to government about the bad economic situation, free fall of the Cedi, high cost of fuel, high taxes, unpaid commitments to contractor and the total absence of efforts to address the growing challenge to bring relief to the people.
The Ghana Union of Traders Associations (GUTA) has petitioned for the reduction of taxes and duties on imported items but government continue to be insensitive to their plight.
The source indicated that the Council of State’s engagement with the President was informed by consultations with various stakeholders on the economy, especially importers’ concerns about high taxes.
At the meeting, it is alleged that the Chairman of the Council, Nana Otuo Serebuo II, indicated that its meeting with the importers and exporters revealed growing discontent over what they call exorbitant taxes at the country’s ports hence the need to bring it to the attention of the President.
The council held discussions with a number of stakeholders, including the Minister of Trade and Industry, Mr. Alan Kyerematen and the Commissioner of the Customs Division of the Ghana Revenue Authority (GRA), Mr. Isaac Crentsil.
The Council also met the Minister of Finance, Mr. Ken Ofori-Atta, and the leadership of GUTA, bringing the month-long consultative exercise to an end.
Addressing the opening session of the meeting between the Council of State and the President, which later went into a closed-door session, at the Jubilee House, in Accra, the Chairman of the council, Nana Otuo Siriboe II, said the council would discuss its findings, conclusions and recommendations with the President.
Nana Siriboe said the council issued its report last year covering its activities during its first year in office. Since then, he said, it had held 57 meetings in both plenary and sub-committee sessions and would soon issue its second report.
He explained that during those sessions, the council considered important appointments, met with various institutions and personalities, received petitions and deliberated on them and considered appointments to boards, councils, authorities and committees.
Additionally, he said, it examined and reported on some very important appointments to positions such as Chairman of the Electoral Commission (EC) and two deputies and four Supreme Court judges.
The council also met with the Lands Commission, the Inter-Ministerial Committee on illegal Mining (IMCIM), the Speaker and the leadership of Parliament, the Governor of the Bank of Ghana (BOG), the National Petroleum Authority, the Minister of Education and the Chief Executive and senior management of the Ghana Cocoa Board (COCOBOD).
In another development, an international tax consulting firm, KPMG, has identified eight different tax policies which are currently derailing the smooth running of businesses in the country.
The policies include the decoupling of the GETFund and NHIL Levy from VAT, Luxury Vehicle Levy and the extension of National Fiscal Stabilisation Levy (NFSL).
The rest are letters of credit for bonded warehousing, non-deductibility of VAT on imports by companies, Tax Stamp Policy, tax reconciliation by employers and high interest rate.
At the Ghanaian-German Economic Association (GGEA) on January 29, 2019 in Accra, a Tax Partner of the KPMG, Kofi Frempong-Kore, stated that the tax policies were presently counterproductive to the operations of businesses in the country.
“For most businesses, their major concerns are that these tax policies are counterproductive to the growth of their operations in Ghana,” he said.
He stated that the decoupling of the GETFund and NHIL Levy from VAT had increased the cost of doing business, a phenomenon that could not be passed to consumers.
“Some businesses are still struggling to adapt their systems to cater for the change against the backdrop of the cost of implementation. Cost of living has increased for the average Ghanaian as the change in the law has brought about increase in the cost of goods and services,” he said.
Mr. Frempong-Kore explained that the luxury tax had increased the cost of operation for companies in the hospitality and car rental industry.
“This cost has consequently been passed on to consumers. Individuals are likely to use the services of unregistered transport businesses as their cost is expected to be cheaper,” he said.
Speaking to a packed hall of both Ghanaian and German businesses, the tax expert urged the government to engage the private sector to eliminate some of them.
Rather than being counterproductive, the Chief Executive Officer (CEO) of the Private Enterprise Federation (PEF), Nana Osei Bonsu, asked the government to use those tax policies as a tool to raise funds to support businesses.
“These tax policies are tools that could be aggregated to create a pool of long-term funding for the private sector.
The private sector operates effectively in the environment of predictability and so shifting the end of the National Fiscal Stabilization Levy for instance is not favourable to the growth of businesses in the country,” he added.
The President of the GGEA, Mr Stephen Antwi, observed that businesses were expectant that the tight liquidity challenges encountered in 2018 would ease considerably this year.
That, he said, was because of the government’s pledge to pay all arrears owed contractors and suppliers in the country.
“With the government ready to spend over GH?74 billion in payment of arrears, we are optimistic that the moment these funds are paid to suppliers and contractors, the cash flow within the system will definitely be good and businesses can flourish,” he said.

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