Deputy Minister of Finance, Dr. John Kumah, has called on Ghanaians to support the government’s revenue mobilization measures as outlined in the 2023 Budget.

According to him, government’s increment of the Value Added Tax (VAT) by 2.5% even though it will lead to an increase in commodity price, is a good measure to alleviate the country’s economic downturn.

Government has announced its decision to increase the Value Added Tax (VAT) by 2.5 percent. This will move the tax policy from its current percentage of 12.5 per cent to 15.

Presenting the 2023 budget to Parliament on Thursday, the Finance Minister said the review is to directly support road construction projects and the digitization agenda.

Speaking on JoyNews’ PM Express, Dr. John Kumah said despite the imminent hike in commodity prices, Ghanaians should not despair but instead embrace the attitude of burden sharing.

“Of course any increment of tax will reflect on commodity prices among others but in the circumstances where we are and where we need burden sharing attitude from everybody in the country to be able to walk out of this economic crunch, global economic crunch which we are also impacted, obviously we expect Ghanaians to support the government to introduce this 2.5 VAT. Of course we countered that with the e-levy to 1% to ease up the burden,” he said.

He added that the only reason the government did not reduce the e-levy any further than 1% was due to the need to increase the country’s tax to GDP ratio.

“[Reducing e-levy to below 1%] is a good argument, but if you look at the data available and where we stand as a country in terms of our revenue percentage to GDP, and we’re doing 12.5% and the target is to reach 15% sometimes you’ll wonder how we’ll be able to achieve these objectives except to agree that as citizens we should be able to contribute more on these taxes.

“I mean, nobody loves to pay taxes, we know how difficult taxes are. But if we really want to achieve the economic growth and prosperity of the country that we’re all looking for then it means we have to do more.

“The nations that we look up to, Europeans and the Americans who are doing well for their economies, if you check their tax rate to their GDPs, some are doing 35%, 40% and even in Sub-Saharan Africa the average rate is 18% and we’re still hovering around 12, 13%,” he said.