• Thu. Aug 4th, 2022

How VAT was withdrawn from Parliament by President Rawlings


Feb 6, 2022 ,

The government of Nana Addo Dankwa Akufo-Addo is dead set on passing the Electronic Transaction Levy, or E-levy, a 1.75 percent tax on all electronic transactions.

Since Ken Ofori-Atta, the finance minister, announced the E-levy during the 2022 budget presentation on November 17, 2021, it has sparked intense public opposition from some Ghanaians, particularly Members of Parliament from the Minority Caucus.

During the budget presentation, Ofori-Atta stated that the new order is part of a strategy to broaden the country’s tax net.

He went on to say that the 1.75 percent tax is also intended to increase financial inclusion and protect the country’s most vulnerable citizens.

Ghanaians’ hostility to the government’s imposition of taxes is nothing new, especially during the Fourth Republic.

Between 1993 through 2000, President Jerry John Rawlings (of blessed memory) had a mainly one-sided NDC Parliament – this is because the NPP boycotted the 1992 Parliamentary election – and intended to implement the new Value Added Tax (VAT).

The announcement angered Ghanaians, prompting a series of protests led by current President Nana Addo Dankwa Akufo-Addo, Dr. Charles Wereko Brobbey, Dr. Nyaho Nyaho Tamakloe, Abdul Malik Kweku Baako, Kwesi Pratt Jnr, Lawyer Akoto Ampaw, Victor Newman, Kwaku Opoku, Napoleon Abdulai, and Stanley Agyiri Blankson, as well

With an estimated 100,000 people in attendance, the ‘kume preko’ march was said to be one of the largest protests ever held in the country.

Due to widespread anti-VAT protests, the Rawlings administration had to withdraw the bill from Parliament. In his sessional address, he assured Ghanaians that his government “has no intention of trying to sneak a disguised VAT past our people.”

On his Facebook page, Samuel Okudzeto Ablakwa, NDC MP for North Tongu, shared excerpts of President Rawlings’ sessional address that resulted to the VAT’s repeal:

“The glaring irony is that the man who led the agitations and questioned President Rawlings’ democratic credentials is now President and contemptuously refuses to listen to the people — fact, President Akufo-Addo just announced this week that he will make sure the fatal E-Levy gets passed at all costs.”

“Power just magnifies our true selves; history settles the score.”

President Rawlings noted in his sessional address, “The reactions to the VAT are one important fact that upsets the government’s fiscal forecasts for 1995.”

“There can be no doubt that the VAT tax system offers the most simple, fair, and successful manner of collecting income,” President Rawlings stated, amid the typical cheers of “hear hear.” However, serious flaws in the conception and implementation of the VAT program, particularly in the area of public education, were quickly revealed in our situation.

“As a result, in response to perceived concerns, the administration dropped the tax.” However, we have paid a high price for this. Revenue expectations were not met, restricting the government’s ability to meet the demands of its personnel.”

“Mr. Speaker, let me assure the nation that our government has no intention of trying to sneak a disguised VAT past our people,” President Rawlings added. Before we resurrect the system, we will guarantee that the typical Ghanaian has a better knowledge of its benefits.

“And there is no doubt in our minds that once they grasp it, and that educational effort is backed up by law enforcement, this tax system will deliver exactly what we need; exactly what we predicted.”

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