An additional income tax bracket of 35 percent from 30 percent, the increase in Value Added Tax (VAT) rate by two and a half percentage points from 12.5 percent to 15 percent, including other major reforms undertaken with respect to VAT exemptions just simply further exacerbate the already fragile state of individuals and households.
Consequently, the Ghana Mineworkers’ Union (GMWU) takes an uncompromising opposition to these increases, particularly the introduction of an additional income tax bracket of 35 percent.
Speaking at the Union’s National Executive Council meeting for the second-half of the year last week, General Secretary, Abdul-Moomin Gbana, expressed the thought earlier mentioned and indicated that while Ghanaian workers may not be opposed to paying taxes, the significant adjustments to the rates and the disproportionate nature of the adjustments – primarily designed to target the few formal jobs within the economy, who, in fact, are already saddled with a myriad of taxes – are like strangling or killing the goose that lays the golden egg.
“The working people of this country are currently under intense pressure due to rising killer inflation, which is in excess of 40 percent, the free fall of the cedi against other major trading currencies, and their overall impact on prices of goods and services.”
He stated further that the timing is also simply not right, and government must reconsider its decision to overburden the current under 10 percent Ghanaian taxpayers who are all engaged in formal employment.
The GMWU G.S. also stated that the key issue that has sparked serious controversy in the last couple of days and has the potential to cause social unrest among working people, and by extension the entire citizenry, is the recent launch of a one-sided Domestic Debt Exchange Programme and its implications on workers’ pensions, life savings, and general investor confidence in the economy.
“Like all workers, miners all over the country are deeply concerned about the implications of this programme on our pensions and individual investments,” Gbana said.
Astonishingly, he added, the domestic debt exchange programme is coming after the President addressed the nation on 30th October, 2022, during which he assured all Ghanaians that: “There would be no haircuts on pensions’ funds and individual bondholders.
“A few weeks after this announcement, however, we are witnessing, rather shockingly, the direct opposite of his original position.”
“Everything so far points, not only to the fact that there shall be haircuts on individual bondholders, but also on workers’ pension since a substantial portion of workers’ pension is invested in government bonds,
“While we disagree with the Debt Exchange Programme because government failed to consult with key stakeholders, like organised labour, we are totally opposed to any debt restructuring programme that would impact on workers’ pensions and individual life savings”.
The Ghana Mineworkers’ Union, in one voice with the TUC(Ghana) and all its affiliates, would like to reiterate without any fear of equivocation that we “will do everything in our power to ensure that our members are fully protected, and that not even a pesewa of pension funds is lost in the Debt Restructuring Programme”.
Touching on the state of the mining sector, Mr. Gbana noted that after over 100 years of mining, Ghana’s mining industry continuous to be dominated and controlled by foreign interest, with over 99 percent of mining companies being foreign, owning 90 percent of the shares, with government left with a paltry 10 percent carrying interest.
“We have for many years chosen the lazy man’s approach of over relying on a ‘tax-royalty’ fiscal regime, where our only source of revenue depends on revenue generated from mining companies/activities in the country through taxes and royalties levied on revenue generated from production.”
Considering the generous fiscal giveaways – including excessive repatriation of mining revenues by multinational businesses, signing of stability and development agreements, etc. – which continues to deny Ghana its fair share of revenue under this so-called tax-royalty fiscal regime, we believe that the time has come for this narrative to change, and ought to change quite swiftly, he concluded.
