A Deputy Minister of Information, Kojo Oppong Nkrumah has justified the possibility of government’s alleged decision to increase taxes which will be announced in the mid-year budget reading.

With just a few days until the Minister of Finance, Ken Ofori-Atta presents the mid-year budget review in Parliament, there are suggestions that government might increase the VAT rate from 17.5% to 21%.

Indeed the Minority in a press conference earlier this morning dubbed ‘the mid-year economic performance and projections; the Minority’s perspective’, presented by Minority Spokesperson on Finance, Cassiel Ato Forson said government will only destabilise homes and businesses if they should go ahead with the increment.

“The Akufo-Addo government should be wary of burdening Ghanaians in its desperation to save face. The fiscal problem is a direct result of shallow opportunism and populism,” Mr. Ato Forson told the gathering.

Mr. Oppong Nkrumah on the AM Show on Joy News, however, asserted that there is the need for government to introduce new revenue measures in order to keep up with some government programs and also deliver on key government projects.

“It you look at some of government programs that it has outlined, you will notice that the sheer numbers or the size increases as the year goes by, so year one year two, the current revenue measures may be able to accommodate it but as you are going on as the numbers increase, you will need to find new measures that will accommodate them” he said.

“We are in a country where tax to GDP ratio is about 16%, ideally we should be doing a tax to GDP ratio of about 25% and the Ashanti Region for example when you are having only 46 to 47,000 individual tax payers and if you compare that to the voter database, again you will be shocked.”

“Admittedly we have a huge gap in this country where people are earning an income and they are not paying taxes and as a result, you have to be taxed some more.”

Meanwhile an Economist at the University of Ghana, Dr Priscilla Twumasi-Baffuor has blamed the possible increase in VAT on government’s flagship program, Free SHS.

She believes that government is having a tough time funding the program hence the deliberate effort by government to increase VAT in order to ease the financial burden of funding millions of students to attend secondary school.

“Government was a bit over ambitious with the free SHS programme and basically, the government is overstretched. If you look at [disbursement of government revenue] after payments of wages and salaries…nothing [is left] for the area of investment. We are just maintaining the status quo,” she said.