On Friday, March 12, the country’s 2021 Budget Statement was presented to Parliament.
Four taxes were suspended butsix new ones were introduced.They areBetting/gaming tax;COVID-19 Health Levy of 1% on VATand a 1% on National Health Insurance Levy (NHIL);Energy Sector Recovery Levy of 20 pesewas per litre of fuel; Review of road tolls; Sanitation and Pollution levy; and Financial sector cleanup levy
Then the Commissioner-General of the Ghana Revenue Authority announced later that Parliament had passed three new tax laws and amended two existing ones to be implemented in 2021.
He mentioned them asPenalty and Interest Waiver Act, 2021 (Act 1065); COVID-19 Health Recovery Levy Act, 2021 (Act 1068); Financial Sector Recovery Levy Act, 2021 (Act 1067); Energy Sector Levy (Amendment) Act, 2021 (Act 1064); and Income Tax (Amendment) Act, 2021 (Act 1066).
He added that the COVID-19 Health Recovery Levy and the Energy Sector Levy would take effective from May 1, 2021.
Today is May 4 and that means these taxes are being paid with all their implications.
According to the government, the new tax policies have become necessary to raise additional resources to fund the budget and implement governmentprogrammes such as the Free Senior High School , Planting for Food and Jobs, Rearing for Food and Jobs and the School Feeding Programme
The delay in implementing the taxes immediately after their announcement was to allow businesses to adjust systems and also more education on these taxes.
The Ghanaian Times has always believed that one of the ways for the government to check revenue shortfall is collection of taxes rather than continuous borrowing.
However, if taxes become regressive, payers complain, even when they are paying them indirectly as in the case of VAT when they pay for goods and services.
Already businesses have hinted of increases in the prices of goods and services.
The Energy sector recovery tax of 20 pesewas per litre of petrol/diesel and 18 pesewas per a kilogramme on Liquefied Petroleum Gas; and Sanitation and Pollution levy of 10 pesewas per litre of petrol and diesel are of significant interest to the public.
This is because they would eventually affect transport fares and prices, particularly those of food, on which every living soul depends, and this is where the citizenry would begin complaining.
Already the poor and the vulnerable are saying they are smarting under the current economic conditions, which means the new taxes would worsen their already precarious situation.
The implications are numerous and varied. For instance, people perceived by relatives and friends as being in the better position economically would further be burdened.
Those poor and vulnerable who would not get any help would be at the mercy of the situation and your guess is as good as that of any reasonable person.
The taxes can also increase bribery and corruption among public servants and others and the government must be watchful there.
However, the Ghanaian Times is very much concerned about the effect of the new taxes on the poor and the vulnerable and so wishes to appeal that if the government does not have in place measures to cushion them, then this is the time to adopt some.
It is also the time for capable employersto support their workers with incentives that help them face the hardship in the system.