Analysts criticize extension of fiscal stabilization levy

Ayesha Bedwei, Partner with Pricewaterhouse Coopers (PwC)

Tax analysts have criticized government for not scrapping the National Fiscal Stabilization Levy in the 2018 budget.

They describe the continuous imposition of the tax as disappointing.

For instance a Partner with Pricewaterhouse Coopers (PwC), Ayesha Bedwei believes the move rather punishes some compliant taxpayers.

The National Fiscal Stabilisation Levy (NFSL), introduced in 2013, was among others to support the economy to put government’s fiscal plans at the time on the right footing.

The levy is to be paid by financial institutions, insurance companies as well as companies providing mining support services.

Per the law that introduced the NFSL, a sunset clause stated for it to be scrapped in 2015.

But Finance Minister, Ken Ofori Atta says its implementation has been extended to 2019.

Commenting on the development however, Ayesha Bedwei maintained that the move must be reviewed.

“Sustaining this short-term tax measure for three years so far which was supposed to be here for less than that and is being further extended is quite disappointing. Government’s reaction is that they need to fund their social interventions that they are doing this year. But I believe that if the other measures bordering on enhancing compliance and widening the tax net are done effectively, we wouldn’t really need to punish these tax complaint taxpayers this way,” she remarked.

She spoke at a post-budget symposium by PwC in Accra.

Earlier, there had been indications by some tax analysts that the levy would be scrapped in the 2018 budget following its continuous stay despite the expiration of the mandate in law.

The session had in attendance Minister of Finance, Ken Ofori Atta; Economist at the University of Ghana – Dr. Eric Osei Assibey, Fatimah Alimohammed – Vice Chairperson of the Agriculture sector of the AGI.

Reacting to some issues raised on the imposition of VAT for instance on mining inputs, Mr. Ken Ofori Atta indicated of continuous engagements to get all concerns addressed.

For his part, Dr. Eric Osei Assibey underscored the need for government to follow strictly, plans of revenue mobilization to achieve the set targets.

In his view, this should also reduce the persistent gaps in revenue mobilization and the attendant challenges with borrowing to shore up the deficit.

Source: citibusinessnews.com