GNCCI CEO Urges New Mahama Administration to Prioritize Tax Reforms

The CEO of Ghana National Chamber of Commerce and Industry (GNCCI), Mark Badu-Aboagye, has made a plea to any incoming Mahama administration to prioritise tax reforms that would reduce the business burden. Specific taxes like the COVID levy and e levy are some of the taxes that ought to be reviewed urgently, Mr Badu Aboagye told PM Express, Business Edition on Joy News.

“Personally, I will be demanding that President elect John Mahama takes out the COVID 19 levy as the first tax to take from his pay,”. We have said over and over again at the Chamber of Commerce, there is no need for this tax anymore.

Scrapping the COVID-19 Levy

During the pandemic, the business community has been particularly opposed to the COVID 19 levy as an instrument by which to support public health measures. Mr Badu-Aboagye said the tax has become superfluous and the additional tax burden on businesses had to stop.

There is still so much recovery for businesses from the impact of the pandemic and keeping this levy just makes things worse for them.” That would remove it immediately, it would provide immediate relief.”

Revisiting the E-Levy

Mr Badu-Aboagye also criticised the e-levy, a tax on electronic financial transactions, which he said had been clumsily implemented despite the potential.

“[The e-levy] was a very brilliant idea, but the implementation has been terribly poor.” They probably have to take it out because it’s been promised. We’re going to hold them accountable for the promises they’ve made to the business community, he said.

While pointing out the e-levy which together with other taxes, made business to suffer.

READ ALSO: President-Elect Mahama Calls for Urgent Reforms in Ghana’s Energy Sector

The Harsh Business Climate and VAT

Mr Badu Aboagye described the current business environment as ‘extremely harsh’ and said efforts were needed to adjust Ghana’s tax regime, especially the high VAT rates.

Everything, even the Standard VAT of 15%, plus on top of that, garnishes nearly 21%. This, he says, directly impacts production cost and therefore prices for consumers.

“These levies are simply the cost of production and there’s a cascade effect on prices and the consumer. They have to review the VAT,” he asserted.

From a recent interaction with a Chamber member who was unhappy about the harsh impact of taxes, Mr. Badu-Aboagye shared an anecdote.

“We sat down with one of our members yesterday, and he was complaining about taxes.” He described how import duties and a few other taxes have ‘much’ pushed his business to the brink,’ he said.

Holding Leaders Accountable

Mr. Badu-Aboagye acknowledged party promises of tax relief during the election campaign, but he offered cautious optimism.

You can say it, and you can do it. In 2016 and 2017 we were here when the NPP said they were going to remove nuisance taxes. He confirmed they did scrap about 15 taxes, but they came back in harsher forms.

“We will keep the incoming administration under close watch to make sure that the promises made to business are followed through,” said GNCCI CEO.

“We’ll be there to ensure promises are kept, and businesses need relief,” he said.

Expectations from the Mahama Administration

Mr Badu Aboagye’s comments in line with concerns that have been expressed by the Ghanaian business community about the high cost of doing business. GNCCI has been advocating for reforms to make the environment for business growth and contribute to the economic development.

Key areas of focus for the Mahama administration include:

Eliminating Redundant Taxes: Getting rid of things like the COVID19 levy and e levy which are just sinking businesses deeper in debt.

Revising VAT Rates: Taking a look at VAT rate, reviewing and reducing the VAT rate so it is manageable for businesses and consumers, for example.

Improving Tax Implementation: Make sure that the government is OrFail better tax policies choose an execution to avoid unintended side effects.

Engaging Stakeholders: Engaging with the business community to find out what they need, and encourage the business environment to be more friendly.

The GNCCI’s call for urgent tax reforms as the incoming Mahama administration prepares to take office also reflects the need for policies which will favour business growth and economic recovery. The new government in Ghana offers an opportunity to address long standing challenges in the country’s business environment; by removing outdated levies, giving a fresh look to VAT rates, and improving tax implementation.

Mark Badu-Aboagye’s comments are a timely reminder that there will be no trust and sustainable economic growth to underpin the benefits of the Promise without major delivery on these ambitions. The business community and the GNCCI will undoubtedly have eyes on ensuring that the much needed relief materializes.