Impose 40% income tax on earnings above $4000

Impose 40% income tax on earnings above $4000 – Tax expert urges govt

• Mr Ampaabeng

A Tax Policy Expert, Mr Alex Ampaabeng, has proposed to the government to impose a 40-per cent income tax on individuals who earned above a cedi equivalent of $4000.00 monthly.

“It is time for the government to consider taxing people who earn more than those earn less, at least if a 40-per cent tax band is allocated to individuals earning higher incomes, more revenue would be generated to boost the economy,” he said at a media dialogue held in Accra on Tuesday.

It was organized by the Natural Resource Governance Institute (NRGI) in collaboration with some Civil Society Organizations (CSOs).

The program was to deliberate on the current economic challenges facing the country and provide recommendations for the 2023 budget.

He said there was the need for the government to tax the rich more to support the poor, stressing that it was not fair for the rich and the poor to pay the same tax rate.

Adding that there was the need for burden sharing and the rich must pay a little more to cushion the poor, indicating that rising food and fuel prices had brought untold hardship on the poor.

Mr Ampaabeng suggested that individuals who earned below GH₵365 should be exempted from paying income tax to give them some financial relief in this difficult times.

“People who earn such less amount should be tax exempted, rather those who earn GH₵700 and above should be taxed as this will ease the burden on people earning low incomes,” he stated.

Mr Ampaabeng bemoaned the high income tax rate in the country, stating that currently, a monthly income of $35 had a tax rate of 5 per cent, $55 attracted 10 per cent and $70 was 17.5 per cent and an income of $2000 to any amount was capped at 30 per cent.

The Tax Policy Expert at Oxfam entreated the government to also scrap all road related levies and rather introduce a road tax to be paid annually by anyone who used the road.

Road tax if introduced, he said, would help the government to generate more revenue.

“We have over 2 million cars on the road yet we are limiting ourselves to just toll booth levies, of which most people find ways to skip payments, leaving it for just the few vulnerable people to pay and that is not fair” Mr Ampaabeng,  said.

He observed that the scrapping off all road levies would help to reduce the cost of fuel.

“A salon car can pay about GH₵50, 4×4 can also pay around GH₵200, tractor and the other big cars can pay at least GH₵500,” Mr Ampaabeng suggested.

Original Source: Ghanaian Times