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Tax exemptions must be re-examined; abolish unuseful taxes – TUC

The Ghana Trades Union Congress wants government to re-examine the tax exemptions captured in the 2021 Budget and also abolished taxes that have outlived their usefulness must be abolished.

“There must be a comprehensive review of benchmark values used to calculate import tariffs, fees and levies at the ports. An increase in the benchmark values for all products that have local substitutes will raise revenue and support the import-substitution agenda under the Ghana-CARES programme”, it said in its preliminary assessment of the 2021 Budget.

It further called for the strengthening of social partnership and collaboration towards economic recovery, stressing, “the economic and social damage caused by COVID-19 is huge. The figures from the 2021 budget paint a dire picture of government finances. Economic recovery is expected to be slow and painful.”

Government has proposed some tax measures to raise revenue, but the TUC said given the massive loss of employment and incomes, a tax approach to recovery is economically risky.

It cited an example of a tax that pushes petroleum price build-up which will reverberate through the economy and make life even more difficult for many Ghanaians.

“However, we support the proposed 5 percent levy on the banking sector. Considering the huge sums that have been poured into saving the banking sector, it makes economic sense for the banking industry to pay back”.

It also noted that: “property tax can be another important source of government revenue if its collection can be properly coordinated by central government, adding, it appears that the District/Municipal/Metropolitan Assemblies have neither the capacity nor the incentives to collect property taxes.”

Employment and incomes

The TUC said job creation must be one of the main economic recovery strategies starting from 2021.

“We acknowledge the efforts government is making to preserve jobs and protect incomes in the public sector. We also recognize the US$750 million support to enterprises in the form of the Coronavirus Alleviation Programme – Business Support Scheme (CAP-BuSS). These are important initiatives”.

“However, the budget is silent on the kind of aggressive employment-creation strategies expected in this crisis situation”, it emphasized.

Pensions

According to a study by Accra-based African Centre for Retirement Research (ACRR), 81% of workers who retired in 2020 experienced shortfalls in lump-sum, compared to the lump-sum they would have received under PNDC Law 247. Those retiring in 2021 and beyond are likely to suffer the same fate.

Government has already approved a top-up of lump-sum benefits for retirees, following TUC’s petition to the President to intervene.

The TUC said it expect the lump-sum top-up to be paid to eligible retirees in the first half of this year

Unemployment insurance

The government is committed to the establishment of the National Unemployment Insurance Scheme (NUIS) and the training and retraining programmes in 2021.

This TUC said is in line with the call for a strong social protection system that offers assistance to people in times of crisis.

It added that : “a National Unemployment Scheme that offers direct income support to workers who become unemployed in times of a crisis like the COVID-19 pandemic is a unique social protection measure for strengthening the operations of the Ghanaian labour market. By offering opportunities for training and retraining, support for job search, apprenticeship and internship, the scheme will help reduce the suffering of the unemployed, preserve their human capital and dignity and ensure social stability”.

The TUC therefore said it will work with government and other social partners towards the establishment and smooth operations of the National Unemployment Insurance Scheme and the training and retraining programmes.

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