Seth Terkper deems Bawumia's tax amnesty proposal as unrealistic

Ghanaian

Seth Terkper, former Finance Minister, has raised skepticism regarding the viability of Vice President Mahamudu Bawumia's tax amnesty proposition, labeling it "unrealistic."

Terkper's remarks follow the announcement by the New Patriotic Party (NPP) flagbearer, promising tax amnesty to all businesses and individuals in 2025 should he secure victory in the December 2024 presidential elections.

Vice President Bawumia

Read full articleasserted that this move aims to allow businesses to commence operations with a clean financial slate before the implementation of his proposed flat tax rate system.

In an interview with JoyNews, Terkper expressed reservations about the plan, remarking that while the idea of amnesty is appealing, its practicality is doubtful.

The former Finance Minister argued that implementing a flat tax rate could complicate the tax system and jeopardize tax fairness and equity.

He cited Excise Tax as an example, questioning whether Bawumia intends to apply a flat rate to such punitive taxes, which are traditionally levied on products deemed harmful or injurious.

"So are you saying that if I have my small car and I go and buy petrol...should I pay the same as the person with V8...who pollutes the environment more?" Terkper queried.

Furthermore, Terkper emphasized the principle of tax equity, asserting that higher earners should contribute more to the country's development. He criticized the current government's decision to increase the top marginal tax rate from 25% to 35%.

While acknowledging the attractiveness of a flat tax rate, Terkper cautioned that it could undermine the fairness and equity of the tax system.

He also accused the current administration of needlessly complicating the tax system, citing the introduction of the VAT flat rate scheme as an example, which he argued added unnecessary complexity for businesses.