The Minority in Parliament has cautioned government against increasing taxes in the impending mid-year budget review which is expected to be presented on Thursday.
According to them, government must withdraw its decision because any such increases would put too much burden on Ghanaians who were already struggling in the country.
Mr Cassiel Ato Forson, Minority Spokesperson on Finance speaking at a news conference dubbed ‘the mid-year economic performance and projections; the Minority’s perspective’ said government would only be punishing the poor with the rises in taxes.
Before this year’s mid-year budget review there are rumours that the government intends to increase Value Added Tax, (VAT), from 17.5 per cent to 21 per cent.
Mr Ato Forson also warned the government to be wary of burdening Ghanaians in its desperation to save face, adding that the fiscal problem is a direct result of shallow opportunism and populism.
He said the electoral promises made by the New Patriotic Party (NPP) during the 2016 elections were intended only to get them elected and convey an impression of fidelity.
“The reality, however, is that it has led to a major problem for the economy which has translated into severe hardship for the generality of our people” he added.
Mr Ato Forson also stated that the country’s inflation had begun to rise again and was now in double-digit following a brief stay at single digit in the last two months.
He said the continuous depreciation of the Ghana cedi was not showing any signs of improvement despite the impressive talk from the government and the Bank of Ghana and presently the Ghana cedi was trading at GHC 4.85 to the dollar, adding that the cedi’s decline if not addressed could reach GHC5.00 to the dollar by the end of the year.
“This will, in turn, lead to a steep rise in the prices of goods and services leading to more hardships for the people,” he added.
Mr Ato Forson also cautioned government against “reckless borrowing” and also apologise to Ghanaians for failing to deliver on their promises.
He said it was strange for the government to assume that cutting or eliminating taxes coupled with expansion in expenditure in a small economy like Ghana’s would immediately translate into economic growth and increased tax revenue.
He explained that the increase in tax revenue would not be enough to offset the loss in revenue as a result of tax cuts, which he said the economy was currently experiencing.
Mr Ato Forson further stated that Ghana’s public debt stood at GHC154 billion excluding the energy bond of GHC4.4 billion and projected the nation’s debt to hit GHS 173 billion and run into debt distress.