'Fixing and Unfixing it'- unpacking the lazy, unproductive politicking of Ghana

It is a truism that in politics, creating mass hysteria can be beneficial by way of the ballot box. If one can find an emotionally charged theme, sum it up with a few catchphrases and put it on the radar of the mass consciousness, one can ride it to the highest political pinnacle.

Such a politician can use this emotionally charged issue like the red flag of a matador waved in front of a charging bull, and lure the bull (the public), literally to the death.

This tactic can be even more beneficial when the targeted politician or political entity carelessly hands over to the opponent golden nuggets and gems that can be used as political tinder to burn and chase the targeted political entity out of office.

History is replete with all manner of politicians who created a cause célèbre (a controversial issue that attracts a great deal of public attention), and then rode it like a rampaging horse to political power. And history is similarly replete with politicians who gifted their opponents the cause célèbre with which to take them out of power.

One such cause célèbre seems to have cropped up naturally (unnaturally?) around the “Fix the Country” campaign, and its counter-campaigners, on the recently introduced tax increases in Ghana, which has led to increments in petroleum products and telecommunication services. The ‘Fix the Country’ campaigners insist that these measures are causing too much hardship. The government recently imposed taxes on petroleum and communication services to pay for the cost of fighting the Covid-19 pandemic.

It is true that the costs of petrol and communication services have gone up since May 1st, 2021. The reasons are not far to seek. The government has introduced a number of taxes for a number of reasons, most, if not all, to take effect from May 1st, 2021. An announcement by the Ghana Revenue Authority ahead of the May 1st listed some of the taxes as follows;

2. COVID-19 Health Recovery Levy Act, 2021 (Act 1068)

This Act imposes a one per cent levy on the supply of goods and services made in the country other than exempt goods or services; and import of goods and services other than exempt imports. The Levy also applies to the supply of goods subject to the VAT Flat Rate. The COVID-19 Health Recovery Levy is not allowable as an input tax deduction

3. Financial Sector Recovery Levy Act, 2021 (Act 1067)

This Act imposes a five per cent levy on the profit before tax of banks. The tax is payable in quarterly instalments. However, for 2021, the levy is payable in three instalments commencing from 30th June 2021.

4. Energy Sector Levy (Amendment) Act, 2021 (Act 1064):

This amendment has added two additional sections, 5A and 5B. 5A - The imposition of an Energy Sector Recovery Levy of GH¢20 pesewas per litre of petrol/diesel and 18 pesewas per kg on Liquefied Petroleum Gas (LPG). 5B - The imposition of a Sanitation and Pollution Levy of GH¢10 pesewas per litre of petrol and diesel respectively.
To do justice to the subject, one must go back and look at each imposed tax, in turn, and establish whether these taxes are necessary. It will become clear, presently, that some of these taxes are good and beneficial, and some are outright crass.

Like all controversial debates, no side is completely right, and no side is completely wrong. And interestingly, not all the possible solutions that could have prevented us from getting to this sorry pass, is on the table. And as for the solutions beyond the screaming, they would simply be lost beyond the cacophony.

Indeed, to do a dispassionate discussion of the issue, the first line of the press statement issued by the Ghana Revenue Authority (GRA), when it made the announcement on these taxes is instructive. The GRA stated, “The Commissioner-General of the Ghana Revenue Authority brings to the notice of the general public, especially taxpayers that Parliament has passed three new tax laws and amended two existing laws to be implemented in 2021.”

To do justice to the subject, one must go back and look at each imposed tax, in turn, and establish whether these taxes are necessary.

The statement “Parliament has passed” is especially instructive. In effect, these taxes were approved by the nation’s parliament, in which the Majority hangs on that majority votes by the closest of margins. It means that the opposition holds an inordinate amount of leverage. Yet, the Majority, representing the government, and the Minority, representing the leading opposition party, saw nothing wrong with ALL the new taxes they were to impose.

Now, are all these taxes necessary? We may need to study each tax in turn.

First, the COVID-19 Health Recovery Levy Act, 2021 (Act 1068), which imposes a 1% tax on all goods and services emanating from the country.

Without a doubt, Ghana’s handling of the Covid-19 pandemic was star performance, and a study of how other nations have fared should tell us that we are not out of the woods yet. A 1% tax on goods and services, in my humble opinion, should not lead to increments in prices if the industry were sincere to take a little less profit as a contribution to the Covid effort. This is especially so, in that Ghana, like the rest of the world, is not out of the Covid menace yet.

It is all too possible that the world may need to undergo a second wave of a more virulent strain of Covid. Government can only take the steps necessary to be taken to save lives if the government is certain that the people on whose behalf it takes the tough decisions, would follow it when it comes time to pay up. This is not partisanship. This is reality. However, it is all too clear that the nature of politics we do in this country is a politics fuelled by a ‘scorched earth policy, that is, destroy everything in your path, including the positives, if necessary, in order to capture the state, because your principal aim is not to build, but to capture the nation, steal as much as you can, and when the people catch up with you at the ballot box, as they surely will do one day, to hand over until you can trick them to give you the mandate in a few years’ time.

That is the NDC’s position, which is why it makes very little noise in parliament and raises Cain out of parliament because the Covid tax is good in the short, medium and long term.

Indeed all political actors should come out in immediate support of the COVID-19 Health Recovery Levy. We committed the debt, and we need to pay it up. And it may save even more lives, yet.

The second is the Financial Sector Recovery Levy Act, 2021 (Act 1067).

This Act imposes a five per cent levy on the profit before tax of banks. The tax is payable in quarterly instalments. However, for 2021, the levy is payable in three instalments commencing from 30th June 2021.
My opinion is that this levy is unnecessary, and should not have been passed in the first place if our members of parliament on both sides knew what they were doing.

Indeed, the so-called Financial Sector Recovery program is a self-imposed hardship that the Ofori Atta Administration at the Ministry of Finance has inflicted on itself, and has no moral and legal authority to pass onto the people of Ghana. This program arises out of the so-called collapse of some private banks and financial institutions. I believe that if these banks and financial institutions had been mismanaged and were collapsing, the sensible thing to do would have been to allow them to collapse, so that other more efficiently managed banks would see the example of perfidious mismanagement.

To assume ownership of these financial institutions, and to seek to manage them as viable business entities, on the back of taxpayers, is unnatural, and if the history of all state banks in the past is anything to go by, would end up with the same fate. There is also a very real possibility that down the line, Ghana would pay judgment debts for the decisions taken with regard to these banks. All of which would have been avoided, if we had just cold-bloodedly stood by and allowed them to collapse.

We should have just let them collapse so that people learn the necessary lessons.

The third tax is the Energy Sector Levy (Amendment) Act, 2021 (Act 1064). This amendment has added two additional sections, 5A and 5B.

5A is the imposition of an Energy Sector Recovery Levy of GH¢20 pesewas per litre of petrol/diesel and 18 pesewas per kg on Liquefied Petroleum Gas (LPG), and 5B is the imposition of a Sanitation and Pollution Levy of GH¢10 pesewas per litre of petrol and diesel respectively.

As of the writing of this piece, I lack the exact figures on exactly what amounts the government seeks to make up, what are the expected volumes of fuel products on which it is presumed to make up the fiscal shortage that the government seeks to make up with 5A, and the duration of the period in which this levy would remain imposed.

A certain degree of education, on why the levy, and why it is pegged at the current levels, and for how long it is to be imposed, would have been instructive. However, whatever, Ghanaians have still not forgotten the Energy Sector Recovery levy, whose operations remain in great opacity to date, and the mention of whose name send both NDC and NPP into great shivers.

With 5B, I dare say that it is one of the crassest decisions taken in our history in recent times, the so-called ‘Borla Levy”, and parliament should very speedily go back into sitting and scrap this levy. Indeed, no member of parliament, particularly those in NPP and NDC, should have the nerve of acknowledging the hardship that Ghanaians go through because Ghana does not need to impose collective taxation on a sensitive product like fuel to ensure that we manage sanitation and pollution effectively.

It is a tax intended to rake in free money, hundreds of millions of dollars, for a particular company in Ghana. It is totally immoral and should be scrapped forthwith, and it is scary that any government would seek to bring about any such law, and that a group of 275 men and women, who live on the taxpayer, would seek to impose such an irresponsible tax on the same taxpayer.

To the ruling government, the screaming that we are hearing from the population, castigating the government, is purely self-imposed, and if we the members of this ruling government are not careful, we are just hammering the nails in our coffin, for just thirty silver pieces.

We should remove the Zoomlion “Borla” Tax before it sends us to the opposition, sooner than later.