Duffuor cautions government against excessive taxation

Former Finance Minister, Dr. Kwabena Duffuor, is cautioning the government against what he described as excessive taxation.

He says instead of increasing taxes, the government should rather build a robust and efficient tax capacity to generate enough domestic revenue to cushion the Ghanaian economy.

He believes building a strong tax regime should be the focus of the current New Patriotic Party government, rather than introducing taxes that could affect the growth of businesses and overburden Ghanaians.

“Excessive taxation; nuisance taxes don’t promote growth. The right tax policy is the one that does not discourage investments.”

Dr. Duffuor was speaking to David Akuetteh on LUV in the Morning on Luv 99.5 FM ahead of the NDC’s 24-Hour Economy Walk in Kumasi on Wednesday.

He said the government’s taxation programme should be measured by what he described as tax incidence to assess the impact of taxes on those paying.

“Efficient tax system that would generate domestic revenue is what you should look at. You should make sure that you build the tax capacity that would give you good revenue,” he said.

The government, as of 2024, has introduced at least 27 tax components, a situation businesses say has the tendency to cripple growth.

Organised Labour has criticised the government for levying 15 percent VAT on electricity consumption and is calling for the abolition of the new tax.

The former Governor of the Bank of Ghana will not describe the government’s proposed 15 percent VAT on electricity consumption as a nuisance tax, but he insists excessive taxation, especially nuisance taxes, should not be encouraged.

“We have something called tax incidence. If you are taxing people, look at, what will this tax do to the one  paying? Next year will the person be able to pay more or still be in good business? If by taxing the person, the person is going to go down, and next year it would be worse off, then it is not a good tax. Nuisance tax should not be encouraged,” he added.

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