Ali Nakyea-Abdallah
Some observers in the tax industry have called for an evaluation of the petroleum tax and other tax components in the Road Fund Levy to positively impact businesses.
Some Ghanaians expressed dissatisfaction at the beginning of this year when the price of fuel was made up of about 70 percent taxes.
Tax Consultant, Ali Nakyea-Abdallah reiterated calls for such laws to be evaluated to determine their real impact on businesses.
Speaking to journalists, he said the subject is still relevant since businesses have complained about the adverse impact of some components of the taxes.
“Industry has always complained about the cost of doing business. What translate into cost is the indirect taxes on the input that they use in their productive process. One of which is the petroleum product so if you have a lot of inbuilt taxes by way of recovery levies, road fund levies and all that, then you introduce another special petroleum levy. If you think that taking off some of them will not affect your revenue base and can ease pressure on these businesses, then evaluate it,” he said.
He pointed out that a comprehensive evaluation will show whether a review of such taxes will impact positively on business operations which could be recouped by corporate tax.
“If you think that when cost goes down these businesses will make more profit and you can get revenue through corporate tax, then you can evaluate and also review,” he stressed, adding that tax evaluation is the best form of determining the effectiveness of tax laws.
Cautioning against calls to scrap taxes without evaluation, Mr. Nakyea-Abdallah stated that taxes are intended for a purpose, hence must always be evaluated before they are removed.
“Taxation is such that you cannot just cancel without finding an alternative. You don’t just review. There are reasons why taxes are levied,” he said.
NPP’s Proposed Reforms
Speaking in March, this year, the President-elect, Nana Akufo-Addo, promised to reduce the corporate tax rate, abolish VAT on Financial Services and remove duties on the importation of raw materials and manufacturing equipment, among other fiscal incentives, to stimulate growth in the private sector.
–Citifmonline