Reduction of taxes on fuel untenable - Finance Minister explains

January 4, 2008 (Spread Lead)

THE Minister of Finance and Economic Planning, Mr Kwadwo Baah-Wiredu, has said it is untenable to reduce taxes on petroleum products.
He said cash revenue generated from levies on petroleum products, as well as revenue generated by the Internal Revenue Service (IRS), the Customs, Excise and Preventive Service (CEPS), the Value Added Tax (VAT) Service and other non-tax revenue agencies all amounted to GH¢4.4 billion last year.
That figure, he said, was far below the projected revenue of GH¢10 billion needed for salaries and development projects. He, therefore, stated that it would not be feasible to reduce taxes in any quarter.
Referring to critics who have called for a reduction in taxes, Mr Baah-Wiredu challenged those critics to come up with suggestions which would generate more revenue for the government for development activities.
Mr Baah-Wiredu, in an interview in Accra yesterday, said the government had to borrow from external sources to be able to pay salaries, build schools, provide health facilities, among the many needs of Ghanaians.
“Interestingly, these same critics continuously blame the government for borrowing too much from external sources. What next?” Mr Baah-Wiredu queried.
He said part of the petroleum levy was also used to cater for the Tema Oil Refinery (TOR) debt which nearly collapsed the Ghana Commercial Bank (GCB), construct roads, feed schoolchildren under the Capitation Grant, support oil exploration activities, among other laudable projects, all aimed at improving the living conditions of Ghanaians.
Mr Baah-Wiredu said revenue generated from taxes was also used to support the National Youth Employment Programme (NYEP) which had currently employed more than 45,000 youth.
The Minister of Finance said it was, therefore, untenable for critics to call for a reduction in taxes and queried, “Should we stop employing the youth? Should we cancel the Capitation Grant which has led to higher enrolment in schools?”
He said it was important for Ghana to be self-reliant, adding that that had to begin from now.
Mr Baah-Wiredu further stated that despite the government’s efforts, more needed to be done to improve salaries, healthcare delivery, education, the provision of employment for the youth, among many other needs.
The minister stated that the time had come for all Ghanaians to pool resources to move the country forward.
He said it was important that Ghanaians paid taxes promptly, worked hard and discharged their obligations honestly and above reproach to further the development agenda of the country.
He said it was important for Ghanaians to resolve to put Ghana first in their endeavours this year.
He also urged critics and sceptics to come up with suggestions which would go a long way to move Ghana to the next threshold of its development.
“Ghana is our home and our actions and inaction could greatly impact positively or negatively on all of us and posterity. We must work for the good of Ghana and the future generation,” Mr Baah-Wiredu added.