Mr. George Akom, the Parliamentary Candidate for Sekyere Afram Plains Constituency for the New Patriotic Party (NPP) has stated that the proposal by NPP flagbearer, Dr. Mahamudu Bawumia, to eliminate specific taxes if elected president is feasible.
Speaking on the Wontumi Morning Show, George Akom said Many Sub-Saharan African countries are unable to generate sufficient tax revenues for public purposes. While it is widely accepted that governments’ ability to tax is shaped by politics, the precise mechanisms through which this relationship takes place in practice remain elusive.
Based on a historical analysis of four major tax reforms in Ghana from the 1850s to the late 1990s, this article captures the various ways in which taxpayers negotiate with the state in an attempt to limit the extent of taxation, especially in cases where state reciprocity falls short of what people expect.
Our evidence suggests that, far from being a recent development, effective taxation in Ghana has long depended on the ability of the state to convince taxpayers that tax revenues will be used for the public benefit.
He acknowledged that the New Patriotic Party (NPP) government had previously abolished taxes in 2017 upon assuming power.
Mr George Akom emphasized the importance of having a contingency plan to mitigate potential revenue losses, a factor he felt was lacking in the previous tax abolishment. A history of misappropriation of tax revenues, overt corruption, and profligacy diminished taxpayers’ support for governments’ tax efforts.
More generally, the article points to the importance of understanding how tax bargaining works in practice and people’s perceptions of their governments over the long term to overcome resistance to tax reforms.
Dr. Bawumia outlined this initiative, among other plans, in his vision statement delivered in Accra on Wednesday, expressing his intention to abolish the E-levy, emissions tax, VAT on electricity, and the betting tax.