- April 29, 2021
- Posted by: Ato
- Category: Taxation
Erstwhile Minister for Finance, Seth Terkper, has called for the introduction of sunset clause(s) in corrective temporary taxes introduced by government in times of crisis.
Mr Terkper, a tax expert, touching on the introduction of taxes by governments as an austerity measure during times of economic crisis, opined that such corrective taxes having served their purpose must be repealed so as to provide relief for businesses and households.
Adding that such taxes in their very nature are meant to be temporary and not permanent and only aims at correcting the worsening fiscal deficit of a country.
Mr Terkper made the above assertions speaking at the maiden PFM Dialogue Series held in partnership with the Natural Resource Governance Institute (NRGI).
His assertions were in reference to the newly introduced taxes by government in the 2021 Budget Statement with particular emphasis on the 5 percent increment on gross profit of banks under the fiscal stabilization levy as well as the Ghs 0.20 pesewas and Ghs 0.18 per litre of petrol/diesel and Kilogramme of Liquified Petroleum Gas (LPG) under the Energy Sector Recovery Levy (ESLA), both introduced by the previous NDC administration.
Arguing out his point, Mr Terkper noted that the two taxes which now seems to have been made permanent by the incumbent government, were originally meant to be temporary and repealed after 3 years by the NDC government after serving their purposes of being used to pay down debts and arrears in the energy and financial sectors.
Meanwhile, the new taxes introduced by government in the 2021 budget is expected to kickstart on May 1, 2021. The implementation of the taxes starting next month, follows the passage of all the taxes into law by Parliament.
Government, with the passage of the new taxes, is expected to raise some Ghs 5.3 billion this year.