Over the years, many Ghanaians have advised our politicians to reduce tax on goods, services, and earnings of Ghanaians. However, as it has always been the case, our politicians are not listening. How will they listen when they need all this tax money to maintain their affluent and undeserved lifestyle?

On September 12, 2005, I published an article on Ghanaweb encouraging our politicians to reduce the tax bracket in order for Ghana to be more competitive. Since then, other Ghanaians have written several articles encouraging the politicians to reduce the tax that Ghanaians pay but of course they (politicians) are not listening. We still don’t have a rational tax regime because we lack rational politicians; rather, we have people who have turned themselves into nothing but tax-collection agencies, thereby ignoring tax rationality. Presently, the tax system is very irrational.

Because of the excessive tax that the government demands, hotel rates in Ghana are among the highest in the world. In 2003, the Hoteliers Association of Ghana complained about the irrational high tax imposed by the government. The Association noted that hotel rates, and other services provided by hotels were very high; in fact, higher than one would expect. The government at that time did not heed their cry. And the government today does not heed their cry.

On Tuesday August 3, 2004 the Ghana Printers and Paper Converters Association cried out, “High import tariffs on printing materials are killing the local industry.” Again, our politicians did not care about the plight of the printing industry, and we all know the consequence – the printing industry that created thousands of jobs for Ghanaians is almost dead.

In August 2005, the Pharmacy Business Executive Association, an association of people in the pharmaceutical industry, called on the government to consider removing taxes and other levies on all drugs to be prescribed under the National Health Insurance Scheme. What kind of human beings will impose a 25 per cent tax on drugs, made up of 10 per cent duty, 12.5 per cent VAT, and 2.5 per cent NHIS? A whopping 25% tax on imported drugs, drugs that may save the lives of Ghanaians? Incredible! Not surprising some Ghanaians cannot afford prescription drugs.

Do our politicians listen to the voice of the people? Not really. On November 28, 2010, the Association of Ghana Industries (AGI) requested the government to waive the duty on specific imported raw materials used mainly for manufacturing, to increase production levels and to accelerate the pace of industrialization. At the moment, the government levies 10 per cent duty on raw materials and this is rendering manufacturers less competitive both locally and internationally.

The Association also sought a review of laws that make it mandatory for manufacturers to take a five per cent withholding tax from suppliers since this is added to the cost of supplies and thereby render local manufacturers uncompetitive. This is reminiscent of the call made by the printing industry and the Pharmacy Business Executive Association in 2004 and 2005 respectively.

Another proof of irrational taxation came to light on October 25, 2010. According to the Ghana News Agency (GNA), the Customs Division of the Ghana Revenue Authority, at the Kotoka International Airport (KIA), destroyed unwholesome, damaged and expired goods, valued at about GHC150, 000 with a duty element worth GHC60, 000, at the Oblogo land fill site, at Weija, in the Greater Accra region. What this means is that goods valued at GHC150,000 attracted a tax of GHC60,000. That is a 40% duty!

It is obviously shameful that the past and present governments, for their selfish interests, have failed to create conducive environments for economic development in Ghana

While the politicians are doing everything to tax Ghanaians and Ghanaian businesses to bankruptcy, they are allowing foreign companies to evade tax. According to ActionAid, SABMiller's subsidiary in Ghana, Accra Brewery sells £29m of beer a year. However, in the past two years it has declared a loss and has paid corporate tax in only one of the four years from 2007-2010. How can the Ghanaian government allow the world's second-largest beer company to conceal earnings through a web of tax-haven subsidiaries thus siphoning profits out of Ghana and parking them offshore. According to Martin Hearson, ActionAid's tax specialist, SABMiller's subsidiaries in Ghana and India have been operating income tax-free because of the company's use of tax havens.

In its report, ActionAid contrasted the tax paid by a Ghanaian and SABMiller. Read this: Marta Luttgrodt sells beer from her small stall in the shadow of Accra Brewery, SABMiller's Ghanaian subsidiary in the capital city. Luttgrodt sells beer from the factory for 90p a bottle and manages to make £220 profit a month. She pays fixed fees of £11 per month to the Accra authorities and a further £9 per quarter to the Ghana Revenue Authority. Meanwhile, Accra Brewery has paid no corporate income tax in Ghana in the past two years.

On August 30, 2010, the Greater Accra Used Car Dealers Association expressed major concerns about the duty charges they pay to the Ghana Ports and Harbours Authority (GPHA) before clearing their goods. According to the car dealers, it was most unfortunate that the duty charged for a single car has been increased by almost 20%. As one of the Dealers said,
these duties and handling charges are killing us and collapsing our cherished business. They make the cars so expensive for the ordinary man to afford. Ghanaian politicians care about themselves, and themselves only. According to the Association, they sent a petition letter to GPHA for negotiation of the charges but their petitions were not heeded by the GPHA.

On December 03, 2010, Dr. Larbi-Siaw, Tax Policy Advisor to the Ministry of Finance and Economic Planning, said that information was still being gathered on rental houses in the country to repackage the property tax regime adding, property tax in some countries form a greater proportion of public income. He explained that small and medium scale enterprises will be taxed under a new scheme that will allow them to go through the laborious input/output analysis.

I have to say a big thank you to Dr. Larbi-Siaw for working hard to ensure that Ghanaian businesses pay taxes and at the same time exempting big foreign businesses like SABMiller from paying taxes. Dr. Larbi-Siaw and his ilk are patriotic Ghanaians.

Now, let’s consider another case of irrational taxation in Ghana. One is exempted from paying taxes on finished solar energy based products but have to pay 15% duty on the components used to manufacture or assemble solar energy products. The commonsense fact is that the person importing the parts and assembling them in Ghana will be creating jobs in the country. Surprisingly, he/she is the person our corrupt politicians place unnecessary taxes on.

Recently, a Ghanaian imported a 2003 Honda Odyssey van to Ghana from the US. He bought the van for $6,000, and shipped it to Ghana at the cost of $1,500. That is a total of $7,500. In Ghana, he had to pay GHC9,100 which is an equivalent of about $6,275 import duty and VAT. That is 84% tax on the van.

Countries collect taxes for the general benefit of their citizens. Can we say that of Ghana? Not really because as would be noted, most Ghanaian Police Stations do not have vehicles for the efficient protection of Ghanaians. The notorious armed robber, Johnson Kombian, was able to kill two Police Officers and wound a third one because those officers were all riding one bike to arrest him. Will any of these greedy politicians send their fathers and mothers to arrest hardened criminals on bikes? Last year, it was reported by our media that some police recruits were living under stairs at the Police Station in Koforidua. With all these tax money and the generous foreign aid flowing to Ghana, we still depend on Sarah Smithurst and her charity NPAC - National (previously Nottinghamshire) Police Aid Convoys to send used police equipment to Ghana.

Our hospitals are still death chambers where most of the sick go to die. We still have good physicians but the government is starving them of the equipment they need to perform their responsibilities efficiently. In 2010, I met an elderly lady in Koforidua. A physician at the Koforidua Hospital had recommended her to have CAT-scan but there wasn’t any at the hospital. She had to travel all the way to Korle-Bu in Accra for a simple CAT-scan. If you find yourself in an emergency situation, you cannot count on an emergency ambulance because there are virtually none in Ghana. Read the experience of a Ghanaian as he narrated elsewhere; I was involved in a very serious accident in Ghana about 3 years ago. Fire and Rescue could not attend to us because they had no fuel. I was stuck in the vehicle for 4 hours and in effect was given up for dead...however, miraculously, I was eventually rescued and bundled into a taxi that whisked me off to Atua Government Hospital in the Eastern Region.


Virtually, the Ghana National Fire Service has no working firefighting equipment; most of our roads are still jungle/dirt roads. Most Ghanaians do not have access to potable drinking water, and most Ghanaians do not have access to electricity. Thus, conditions that will boost both the public and the private sectors are deficient. In short, Ghana is still very undeveloped.

If the politicians are not spending our tax money in improving upon the lot of Ghanaians, then why do they impose high taxes on Ghanaians? Dr. Larbi-Siaw may be correct in postulating that property tax form a greater portion of public income in some countries. In many countries, property tax is levied on every residential and commercial building. Unlike Ghana, however, monies from such property taxes are used to build and maintain highways, equip hospitals, schools, and provide other essential services that taxpayers enjoy. In short, the property taxes are put to good use for the benefit of the citizens. Where will Dr. Larbi-Siaw’s property taxes go?

If there is little to show for the millions of dollars Ghana receives in foreign aid then what is the money used for?

Ghanaians are over taxed because the greedy politicians need the money to service their undeserved and insatiable tastes. They are thieves in political clothing. The politicians are so selfish and greedy that most of them have refused to declare their assets, as demanded by the constitution. They need our tax money to sponsor their expensive oversea trips. They need our money to buy presidential jets for their comfort. Our politicians need to overburden us to buy gold chains for themselves; they need our money to purchase a fleet of vehicles for themselves, they need our money to hire private security to protect themselves while starving the police of the necessary equipment to protect Ghanaians; they need our money to educate their children abroad while some Ghanaian pupils study under trees; they need our money so that they can spend $7.2 million to travel to South Africa with their drivers, cooks and others to watch the World Cup; they need our money to give themselves interest free loans to purchase vehicles for themselves. Technically, these loans are not paid back since they receive hefty end of service gratuities (ex-gratia) to pay off the loan and have millions of cedis left. While they are paid their end of service gratuity promptly, it takes several years for a non-politician to receive his or her gratuity. They need our money to import drinking cups with their portrait on them; they need our money to cerebrate unnecessary anniversaries. They need our tax money to run to foreign hospitals for treatment when they fall sick. Meanwhile, they starve Ghanaian hospitals of equipment. They need our money to pay for foreign trips for their girl-friends.

Ghanaians need to wake up! How long can we allow a few Ghanaians to rob the majority of their hard-earned money? In the process, they condemn Ghana to a poor country where the majority are living in abject poverty.

Dr. Kwaku Obosu-Mensah
Associate Professor of Sociology
Lorain County Community College, USA