International tax consulting firm, KPMG, has identified eight different tax policies which it said are ruining the smooth running of businesses in Ghana.
The policies include the decoupling of the Ghana Education Trust Fund (GETFund) and National Health Insurance Levy (NHIL) Levy from VAT, Luxury Vehicle Levy and the extension of National Fiscal Stabilisation Levy (NFSL).
The rest are letters of credit for bonded warehousing, non-deductibility of VAT on imports by companies, Tax Stamp Policy, tax reconciliation by employers and high interest rate.
A Tax Partner with KPMG, Kofi Frempong-Kore, stated that the tax policies were presently counterproductive to the operations of businesses in the country.
“For most businesses, their major concerns are that these tax policies are counterproductive to the growth of their operations in Ghana,” he said.
He spoke at a Ghanaian-German Economic Association (GGEA) in Accra
Mr. Frimpong stated that the decoupling of the GETFund and NHIL Levy from VAT had increased the cost of doing business, a phenomenon that could not be passed to consumers.
Some businesses are still struggling to adapt their systems to cater for the change against the backdrop of the cost of implementation. Cost of living has increased for the average Ghanaian as the change in the law has brought about increase in the cost of goods and services,” he said.
Mr. Frempong-Kore explained that the luxury tax had increased the cost of operation for companies in the hospitality and car rental industry.
“This cost has consequently been passed on to consumers. Individuals are likely to use the services of unregistered transport businesses as their cost is expected to be cheaper,” he said.
Speaking to a packed hall of both Ghanaian and German businesses, the tax expert urged the government to engage the private sector to eliminate some of them.