Summary
- The government aims to avoid overburdening Ghanaians by refraining from introducing new taxes.
- Instead of widespread taxation, the focus will be on collecting from tax evaders and non-compliant individuals.
- The suspension of the 15% Value Added Tax (VAT) on electricity consumption and the GHS100 annual levy on petrol and diesel vehicle owners has created a GHS1.8 billion revenue gap.
On a hot afternoon in Ghana, Finance Minister Dr. Mohammed Amin Adam spoke to a room full of journalists about the topic of taxes. He appeared resolute as he addressed the nation’s fiscal challenges and the room buzzed with anticipation.
“We won’t overburden Ghanaians with more taxes,” he declared firmly. His words resonated with a population weary from economic hardships. The Finance Minister’s commitment came as Ghana finalized an agreement with the IMF, securing vital financial support through the Extended Credit Facility (ECF) arrangement.
The Ghanaian government faced a tremendous challenge after suspending the 15% Value Added Tax (VAT) on electricity consumption and the annual levy on petrol and diesel vehicles. The move left an enormous GHS1.8 billion revenue gap that needed to be filled. However, Dr Adam was resolute in his stance that Ghanaian taxpayers should not bear any additional burden.
Instead of imposing more taxes, the government opted for a challenging route. They decided to track down those who had avoided taxes and slipped through the tax net. The Finance Minister expressed his determination to collect taxes from those who have failed to pay their dues. His message was straightforward: tax evaders would not be shown any leniency.
Dr. Adam acknowledged that aggressive revenue mobilization alone wouldn’t suffice. Ghana needed a delicate balance. While revenue generation mechanisms announced in the 2023 and 2024 budgets would be enforced, the government also recognized the importance of expenditure rationalization. “We’re not just about collecting; we’re about spending wisely,” he emphasized.
The Finance Minister outlined two critical measures. First, reforms within the tax administration would ensure proper assessments and efficient tax collection. Second, the government aimed to curb overspending by onboarding more agencies to the Government Integrated Financial Management Information System (GIFMIS). This move would prevent state institutions from exceeding their budgets or making unauthorized expenditures.
Dr. Adam’s words held significance, recognizing the sacrifices made by Ghanaians since the beginning of the IMF-supported program in May 2023. The reforms had impacted individuals and businesses alike, but he encouraged patience and resilience. “Together, we will persist,” he assured. “Fiscal consolidation will bring relief to the people of Ghana, reestablishing our position as one of the world’s fastest-growing economies.”
As the press conference ended, Dr. Adam stepped away from the podium, leaving behind a room filled with questions and hope. The road ahead would be challenging, but Ghana’s determination remained unwavering. The promise echoed through the halls of power: no overburdening, just a steadfast pursuit of fiscal stability.
