Business
The higher the taxes, the higher the incidence of tax avoidance – Dr. Obeng
President of the Ghana Union of Traders Association, Dr. Jospeh Obeng, says the higher Ghana’s taxes go, the higher the incidence of tax avoidance.
He explained that with the tax burden increasingly becoming unbearable for average Ghanaians, business owners etc. would begin to find ways to avoid paying taxes in order to survive in an already harsh economic climate.
He was reacting to parliament’s passing of three tax bills, i.e. the Income Tax Amendment Bill, the Excise Duty Amendment Bill and the Growth and Sustainability Amendment Bill, on Friday evening.
According to him, these taxes are inimical to businesses as they could lead to business collapses and job losses in the near foreseeable future.
Speaking on JoyNews’ PM Express, he said, “Yes, because tax when it is affordable the compliance level is high. When taxes are extortively high, then you’re not even helping people on their integrity. Those people who even go to church will then be dodging, and you’re not helping people to even worship their god. This is exactly what happens, because then it becomes survival of the fittest and they cut edges.”
Dr. Obeng further added that the new taxes would lead to a price surge on the market.
According to him, Ghana’s high inflation is not caused by excess liquidity, but by a long litany of taxes that pushes the price of goods and services upwards on the local market.
“That is oversimplification. It’s not easy. When there is inflation, the inflation that we’re suffering now is not as a result of excessive liquidity in the system and that by the method of Bank of Ghana we have to mop up the excess liquidity by everyday increasing the monetary policy. We’ve done it since 2021, mopping up this excess liquidity and always the inflation is going up.
“You know why? Because the inflation that we’re having is as an accumulation of cost. A cost resulting from these lines of taxes, even at the port, Tema Port, the line of taxes there is about 20. In the sub-region you can’t count to over 10. And these taxes are piled on Ghanaians and then the lending rate is also compounding the problem. Because if you have to borrow at the rate of 40% it obviously increases your costing,” he said.
COCOBOD has assured that concrete steps have been taken to ensure it is able to secure enough funds to finance its annual cocoa purchases in the 2023/2024 crop season.
Against the backdrop of a reportage by Reuters that the firm had borrowed up to $200 million from cocoa traders to plug its funding gap, COCOBOD said it had adopted a two-prong financing strategy to ensure that it obtained the required funds for the purchasing season.
A statement from COCOBOD in response to the Reuters report indicated that it had had firm assurances from its bankers of making funds available in time for the purchasing season and that a “Cocoa syndicated Loan has been laid in Parliament for consideration and approval.”
Below is COCOBOD’s full statement.
FINANCING OF PURCHASES FOR 2023/24 CROP SEASON
There have been some recent publications in the news media in relation to funds for cocoa purchases for the 2023/24 Crop Season.
We wish to brief our stakeholders on this very sensitive national issue as follows:
COCOBOD planned a two-prong financing for the 2023/2024 Crop Season in an effort to diversify Its source of funding for the annual cocoa purchases.
The strategy was therefore, to use a prefinancing arrangement with the international buyers to raise an amount of US$400 million for purchases at the beginning of the Season in September 2023.
These initial funds were expected to be augmented by an additional US$800 million loan from a syndicate of lenders by the end of November 2023. After engagements with buyers for several weeks, the arrangement was however discontinued.
Thus, since the beginning of the Season, cocoa purchases have been financed with noncollateralized cocoa sales proceeds. COCOBOD is therefore still in the process of securing the syndicated loan for the 2023/24 Crop Season.
As a matter of fact, the Board has so far received firm response from our bankers in this regard, and the Cocoa syndicated Loan has been laid in Parliament for consideration and approval.
We wish to use this medium to assure our stakeholders that the necessary arrangements have been made to secure enough funding for cocoa purchases for the year under review.
ISSUED BY: PUBLIC AFFAIRS DEPARTMENT
Vice President Dr. Mahamudu Bawumia is actively seeking Czech investors for the country.
Dr. Bawumia emphasized that Ghana remains the best country in Africa for investment due to its stability, peace, and growth opportunities for businesses.
He made these remarks during his meeting with the Czech Prime Minister, Peter Fiala, at the Jubilee House in Accra.
“Ghana is an excellent place for doing business. We are the most peaceful country in West Africa and the second most peaceful country in Africa. It is crucial for anyone looking to invest in Africa to consider Ghana as the ideal destination for business.”
“I am confident that this will open up opportunities for our respective business sectors,” he stated.
South Dayi Member of Parliament, Rockson Nelson Dafeamekpor, has said that the ’24-hour Economy’ project conceived by the flagbearer of the National Democratic Congress (NDC) Former President John Dramani Mahama will turn the economy around if implemented.
Mr Mahama proposed the ’24hr Economy ‘ project when he met with officials of the country’s mother workers union on Tuesday, November 7, 2023 at the start of his engagement with key stakeholders in a quest to return to power.
Dubbed ‘Building Ghana Tour’, the interactions with the stakeholders is to apprise them of the policies the next NDC administration will implement to transform the economy.
At Tuesday’s engagement, he said “NDC was left alone as the solitary voice seeking to hold the government accountable and speaking up for the voiceless Ghanaian and we were often cast out as spoilt brats who were ranting just because we have lost power.
“Today, the chickens have come home to roost and we are all affected.”
Commenting on this in a tweet, Mr Dafeamekpor said “Some concrete Examples of John Mahama’s ‘24hr Economy’ Projects include Terminal 3 at Kotoka, Tema Port Container Terminal, New Ridge Hospital, Maritime Hospital, Tema, UGMC, Legon, Kejetia Market, Accra Data Centre, the TamaleTeaching Hospital. It’ll revolutionize the economy.”
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