Dr. Patrick Assuming, a development economist at the University of Ghana Business School (UGBS), has emphasized that although some tax policies may temporarily address some of the problems facing the nation, Ghanaians should think about more long-term solutions.
He argued that rather than calling for the complete elimination of taxes, Ghanaians should hold the government responsible for the taxes they pay.
This follows demands made by Arise Ghana protesters for the elimination of levies on products like petroleum.
He said, “But we also have to look at the broader picture and think longer term. So, we may do that today and it may bring fuel prices by around 3cedis and 50 pesewas or so. But if we have not addressed the fundamental challenges, the fundamental problems that have brought us here, you’d do that today and three months down the line we’re back to 11 cedis.”
“So, while some adjustments to the taxes may bring immediate relief, for me I think the most important thing is to look at addressing the weaknesses within the Ghanaian economy that has led to a point where the currency is sharply depreciating, and frankly over the last few years the economy is not doing well, and it’s not creating enough jobs for the youth,” he said on JoyNews.
According to Dr. Assuming, tax cuts now would cause Ghana’s debt gap to expand, increasing the nation’s debt to GDP ratio..
“I think if the demonstrators were making that kind of demand or requesting that government show a little more accountability in terms of how public money is spent, I think that will be a more sustainable solution to the current problems we have.
“We may decide to cut the taxes, but the other thing is that if we decide to cut taxes today, you know, the state of government financing is such that it’s going to lead to a situation where our deficit will widen and our debt will widen ultimately at some point down the line you have to bring back taxes to pay off the debt,” he said.
“So, I think there is every legitimate reason to ask and demand that there is better accountability and better use of the taxpayers’ funds and also that the economy is better managed and ensure that we are on a sustainable path, that the currency gets strengthened and also there is growth that leads to better employment opportunities for the youth,” he concluded.