The Convention Peoples’ Party (CPP) has promised to abolish tax exemption for the president when it comes to power in January 2009. Currently, the President of the Republic of Ghana enjoys tax holidays across board, including, income tax and the much-maligned value added tax (VAT); when even the most impoverished Ghanaian is paying some form of tax. When contacted to elaborate on the proposed policy, Dr Nii Moi Thompson of the CPP’s manifesto committee said the policy is meant to generate both ethical and psychological effect; so that the President is not only speaking about the need for Ghanaians to pay tax, but is seen paying tax himself. “It makes sense for the President to pay tax, so that morally, he can ask people to pay tax. By paying tax, the President will be leading by example”, Dr. Thompson pointed out. This new policy is captured in the party’s manifesto launched last week. A recent study by a global network of economists titled “How Tax Policies Fleece the Poor” points firmly towards the importance of local taxation as a means of raising money to fund poverty eradication. The report recommends that solving the tax puzzle involves looking not only at the money and resources that flow into poor countries from rich developed countries, but also at those tax policies that countries already have, but are unable to marshal for the fight against poverty. One of those could perhaps, be the future president paying tax. Revenue leakage is also the bane of poor countries hard pressed for cash to implement development projects. The study further found that low tax yield in poorer regions of the world limits the domestically generated resources available to governments for essential public services, such as healthcare and education. It also hampers wealth redistribution, which is perhaps one of the reasons why developing countries are increasingly unequal. The shortfall is partly met by aid payments from the rich world, but these have proved volatile and have often come with harmful economic strings attached. The report says dependence on foreign aid makes governments of poor countries become less dependent on local tax generation to fund human development. The report argued strongly that local tax generation is also one of the means by which poor countries can begin to free themselves from dependence on handouts and the punitive conditions often attached to aid. “Tax can help countries determine their own route out of poverty. But in the past 30 years, low-income countries have experienced a slump in the amount of tax they collect because of falling tax yields from trade taxes and the stagnant rate of direct taxes, such as income and profits taxes”, says the report. Judging from the need to Marshall all forms of taxes, the CPP might just be about right to commit its president to pay tax. Under its social policy the CPP promises to rescue tenants and small businesses from greedy landlords by revising the Rent Act and enforcing it to reduce rent advance, and increase protection for tenants and SMEs that land and factories to operate. Dr. Thompson says the lack of affordable houses is one of the promises the NPP government promised but failed to deliver. “The high rent for domestic accommodation creates a malignant cycle for many workers.” The CPP’s manifesto says there is currently no comprehensive framework for the conduct of social policy in Ghana, despite attempts by successive governments to introduce one. “Social policies so far have been largely uncoordinated responses to donor demands to meet the Millennium Development Goals (MDGs) and not a reflection of a genuine desire by our leaders to improve the living conditions of our people.” According to the manifesto, Ghana is therefore left with policies of convenience, rather than policies of conviction. “As a result of this, the quality of life in Ghana has declined in recent years, as reported by the United Nations Development Programme (UNDP). Indeed, Ghanaians are living shorter lives now than they did only a decade ago”, says the manifesto. Source: Public Agenda