Vitus Azeem Stirs Taxation Controversy

If the call by the Synod Clerk of the South Volta Presbytery of the Evangelical Presbyterian (EP) Church to the government to rope churches into the tax net is controversial, then the more controversial topic for debate is the latest call by Vitus Azeem to tax funeral and wedding donations, saying it is a sure way to raise more revenue.

When Reverend Frank Anyidoho, EP Synod Clerk, raised the concern with the explanation that churches are more of business organisations than religious institutions, the majority of Christendom held a strong contrary view. Their divergent argument was that churches are non-profit making institutions.

Whilst the churches are still wondering whether the government would consider the Synod Clerk's suggestion, then comes the anti-corruption crusader, who has also tabled a new tax subject for in-depth consideration and, perhaps, debating.

Vitus Azeem says President Akufo-Addo and his economic management team should take a critical look at such occasions as sources of revenue, and channel the amounts into poverty alleviation and social intervention programmes.

In his words, "Donations are gifts and need to be taxed."

He went on to say that incomes of the bereaved family members and wedding couples, as well as the incomes of huge donors at these events, need to be investigated as well for tax potentials.

Mr. Azeem, who is the Executive Director of non-governmental organisation (NGO) Centre for Budget Advocacy Ghana, raised the topic at a workshop in Accra, organised by SEND Ghana.

The event was held in collaboration with the UNICEF, OXFAM, Ghana Anti-Corruption Coalition (GACC), West Africa Civil Society Institute (WACSI), Christian Aid, SOS Children Villages, Ghana Integrity Initiative and Action Aid, on the theme: 'Financing Social Protection to Reduce Inequality.'

Noting that Ghana's corporate and marginal tax rate of 25% is too low and so needs to be reviewed upwards, Mr. Azeem encouraged the government to introduce new taxes and remove or reduce harmful tax concessions and exemptions, saying that the rich must be willing to, and be made to pay for the poor, and the tax collectors must be more honest or be punished for dishonesty.

To this end, he cautioned the New Patriotic Party (NPP) government against plans to lower taxes, as contained in the party's manifesto.

"I would like to point out that I do not support the NPP government's decision on some of the so-called 'nuisance taxes," he said.

The NPP government has scrapped the 17.5% VAT on domestic flights and financial services, introduced a three percent VAT Flat Rate Scheme for wholesalers and retailers, instead of 17.5 percent, and abolished the 1% Special Import Levy, among others.

He pointed out that from past experience, the scrapping or reduction of these taxes does not lead to any relief for tax payers.

"They are not targeted at poor and low-income earners, and possibly have unintended effects. They will benefit the haves in society, including the businesses who were promised the relief.

"They are not nuisance taxes and can bring in a lot of revenue. They have a relatively high revenue yield potential," Mr. Azeem said.

He challenged assumptions that stringent tax rules will impede the promotion of the private sector as it is levied on profit, insisting it is also not a cost on production, as some business players try to portray.

Considering the two strong arguments by the two personalities The Chronicle has mentioned today, the government and all stakeholders ought to sit at a round table to weigh the pros and cons of these two new tax sources, and should the pros outweigh the cons, Ghanaians would be ready to support the move, once cogent explanations are given for taxing churches, weddings and funeral donations.

Read Full Story