Accra, Ghana, April 18, 2019//-Ghana’s government has raised a whopping amount of GHC1.040 billion through the dreaded national fiscal stabilisation levy (NFSL) since its introduction in 2013.
This shows that the government which inherited the levy from its predecessor is feeding fat on it despite the hue and cry of businesses.
Besides paying multiple taxes to the government, data from the Ministry of Finance indicated that the government collected GHC299 million in 2018, up from GHC217 million in 2017 from the levy.
It added that GHC139 million and GHC172 million were realized from it in 2016 and 2015 respectively. While an amount of GHC162 million was raked in 2014 as against GHC50 million in 2013.
The Akufo-Addo-led government which promised to abolish the levy when it was in opposition at time of the imposition of the levy, rather took off the “stabilization” from the tax thereby shortened it to “National Fiscal Levy” (NFL).
The levy which covers nine sectors of the Ghanaian economy including universal banks, breweries, Non-Bank Financial Institutions (NFIs), insurance, mining support services, telecommunications, and shipping and maritime, was among others measures introduced on July 15, 2013 to help reduce Ghana’s growing deficit.
It was pegged at five per cent of the accounting profits of specified companies and institutions in the nine sectors. It was to last for 18 months which ended January, 2015, but this is April 2019 and the tax is still in force.
Meanwhile, the previous government, which introduced it, is said to have promised they were going to remove it from 2017 budget, but they lost the elections so the onus is now lies on the current government to get rid of it.
Although, the economy has been recording impressive growths since 2017, the government failed to waive to the levy which has outlived its purpose and it is hurting the affected businesses.
MTN Ghana pays the highest
MTN Ghana is said to be the highest payer of the levy as data from the government revealed that the telecoms operator paid a huge amount of GHC217 million since 2013, representing 12 per cent of the total contributions in the West African country.
At the company’s recent stakeholders’ forum held in Accra, the Chief Financial Officer of MTN Ghana, Modupe Kadri , said although the levy was introduced with sunset clauses, it had continued and it was time it was waived.
He explained that waiving the levy, which is deducted before profit is declared, would go a long way to make the telecom industry robust to continue its positive contributions to the Ghanaian economy.
The company said the continuous stay of the levy in the national budget beyond December 2017 is unfair to MTN because it is the only telco that pays the levy.
It could be affecting its level of commitment to invest in the network for future expansion which contributes greatly to the development of the telecoms industry in Ghana.
MTN could use the freed up money for further network expansion to the rural areas which are unserved or underserved, or it could be invested in additional CSR projects in deprived communities across the country.
Tax experts unhappy
Since the extension of the levy, tax analysts in the country criticized the government for not scrapping the tax especially in its 2018 budget. One of such analyst is Madam Ayesha Bedwei, a Partner with Pricewaterhouse Coopers (PwC).
According to her, the move rather punishes some compliant taxpayers operating in the West African second largest economy.
Madam Bedwei who spoke at a 2017 post budget symposium organized by her outfit said: “Sustaining this short term tax measure for three years so far which was supposed to be here for less than that and is being further extended is quite disappointing.
Government’s reaction is that they need to fund their social interventions that they are doing this year. But I believe that if the other measures bordering on enhancing compliance and widening the tax net are done effectively, we wouldn’t really need to punish these tax complaint taxpayers this way”.
However, Ghana’s Minister of Finance, Ken Ofori-Atta said the levy’s implementation has been extended to this year.
Analysts have predicted that the dreaded levy is likely to be seen in the 2020 budget and beyond.
By Masahudu Ankiilu Kunateh, African Eye Report
Email: mk68008@gmail.com
