General News of Friday, 3 June 2016
Government does not intend to introduce new taxes, President John Dramani Mahama has said.
He was debunking reports that government intends introducing new taxes that will affect allowances and pensions.
The President who was on an official visit to Cote d’Ivoire tweeted on Wednesday evening to calm the waters over the reported taxes.
“Government has no intention of introducing new taxes,” he tweeted.
The Minister of Finance, Mr Seth Terkper, stirred controversy when he stated at a Graphic Business/Stanbic Bank Breakfast Meeting in Accra last Tuesday that, “Yes, allowances must be taxed, They are income.”
Speaking on the new Income Tax Act, the Minister explained that, “Income needs definition broadly or else there is the tendency for the government or the law to tempt one or put money in places not attracting tax.”
In response to a question on the 20 per cent tax on employee retirement benefits [End of Service Benefits], Mr Terkper said, “it’s a thorny one because you are exiting. But remember that as you make your social security contributions, they are exempt from tax even though it is part of your income.”
The statements from the Finance Minister have elicited fierce response from public sector workers and pensioners. In their expression of protest, they warned that they would do everything to resist the introduction of such taxes.
But the Finance Ministry has since come out to deny plans to introduce any such taxes. In a statement, the Ministry explained that the minister was taken out of context.