The initial argument that Mahama taxes the people a lot has stirred up negative reactions among the public, who frown against the idea.
President Mahama has, however, trashed circulating reports in the media saying that government intends to introduce new taxes. To clarify his stand on the issue, the president took to twitter on Thursday and assured Ghanaians that his administration has no plans of doing so.
The President’s assertion follows the recent argument by the Finance Minister Seth Tekper who suggested that pensions and allowances should be taxed to ensure that citizens pay their taxes. Seth Tekper Speaking at the first Graphic Business Breakfast Series for this year said that allowances and pensions are being taxed under the new income tax law, Act 896, 2015, because they are all forms of income no matter how they are earned.
He continued that the new tax law has become necessary because some tax payers were avoiding tax by hiding their income in areas which were previously not taxed. He said:
“Allowances are income. The issue I know is a very difficult one, it’s about taxing income and if you do not define income broadly, you will have tax payers either through avoidance or hiding the income in areas which are not taxed. It’s a thorny one.”
Moments after that, news begun circulating in the media that the Mahama-led government is making plans of introducing new taxes on workers’ income. This of course stirred up negative reactions among the public, who were frowning against the idea that Mahama taxes the people a lot. Government has tried to clarify the issue in many ways as it maintains that the Finance Minister was only misunderstood.
The Ministry of Finance has subsequently clarified the Minister’s position after Ghanaians started reacting angrily to the news. The ministry said the media “misrepresented the comments of the Minister to say that income tax imposes a tax on pensions.”
The Ministry further explained that pensions are exempted from taxes per the laws of the land. The President also, to clarify issues, stated on his twitter handle that “Government has no intention of introducing new taxes”.