Seth Terkper Describes Bawumia’s Tax Amnesty Plan for Businesses in 2025 as ‘Attractive but Unrealistic’

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Seth Terkper, the ex-Finance Minister, has raised doubts about Vice President Mahamudu Bawumia’s tax amnesty plan, deeming it “unrealistic.”

Bawumia’s proposal promises tax forgiveness for businesses and individuals if he wins the December 2024 presidential elections, aiming for a fresh start before implementing a flat tax rate system.

Terkper, speaking on JoyNews, acknowledged the appeal of the amnesty but deemed it unfeasible. He cautioned that a flat tax rate might complicate the tax system and undermine fairness. Terkper also questioned whether punitive taxes like Excise Tax would be subjected to the same flat rate under Bawumia’s plan.

“So are you saying that if I have my small car and I go and buy petrol and if it’s 4 cylinders or two cylinders, should I pay the same as the person with V8, V6 and the rest who are the governors and pollute the environment more?” he quizzed.

“Because excise is designed to be punitive, that is why it’s on alcohol, petroleum and tobacco which are meant to be injurious and harmful products. So again what are you going to make flat about this? A single rate?”

Furthermore, the ex-Finance Minister elaborated on the principle of equity underlying the income tax system, emphasizing that higher earners should contribute proportionally more. Terkper noted that the current government raised the top marginal tax rate for the highest earners from 25% to 35%.

“It may sound attractive but the flat rate will undermine what we call the equity of fairness of the tax which is a very important principle which states that the more you earn, the more you must pay towards the development of the country,” he said.

Mr Terkper also accused the current administration of causing the tax system to become needlessly complex.

He criticised the introduction of the VAT flat rate scheme, which he said, made the tax system more complex.

“It was this same administration that removed Get fund and NHIL from the VAT and made it straight levies which added the complexity because businesses had to file separately for VAT and file separately for straight levy, the two straight levies and then they were denied input tax credit or refund which was a characteristic of the VAT.”

Source: JoyNews


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