Do you know the government is double-taxing Ghanaians? The government, as part of its efforts to raise revenue through statutory taxes and levies to develop the country, is a step in the right direction however; the government’s intention of double taxing and “stealing” from Ghanaians cannot be swept under the carpet.
Double taxing in this article refers to a situation in which the government charges a set of taxes/ levies (X) on the value of goods or services (Y) bought by a customer and then adds (X & Y) as the total cost of goods. It then goes ahead to charge additional taxes or levies called (Y) on (X & Y) when (X & Y) is already the sum of the value of goods purchased plus initial taxes and levies. This practice cheats the buyer, as he or she is charged new taxes and levies on previous taxes and levies paid for the same product or service.
Now that this double taxing is clear, let us make some progress.
How the government is double taxing Ghanaians
The government of Ghana is no doubt the highest employer of chartered accountants and tax experts in Ghana, and these gems need to help do the right thing by ensuring that indirect taxes and levies charged on purchases are calculated ethically to reflect a true and fair value of what a consumer must pay.
The amount charged as taxes and levies increase the cost of goods and services bought by businesses and individuals, hence calculating it wrongly to the benefit of the government and or double taxing the ordinary buyer must not be entertained.
Ordinarily, when one makes a purchase in a shop, restaurant, or anywhere else, tax receipts are to be issued to the buyer and the full amount captured is settled as well.
Currently, the government of Ghana is charging levies and taxes on the cost of goods bought, which already includes some other taxes.
Look at this scenario. Assume you bought item ABC costing GHS200.00 and the taxes and levies you are to pay add up to 20% of the cost of the item. In that case, the total amount (the portion of the total cost of GHS200.00 belonging to the seller and GHS40.00 being taxes and levies belonging to the government) should add up to GHS240.00.
But, let the truth be told, the government of Ghana through its unethical double taxing, levying, and stealing will charge you more than GHS40.0 as tax/levy.
Nearly 99% of Ghanaians are not aware of this, hence we let it go, which should not be the case.
When you buy a product or service in Ghana, the government is supposed to charge a total tax and levy of 22% but in reality, you are charged 23.1%, thus 1.1% more than you are supposed to pay due to how the taxes and levies are computed.
To make this even clearer, let us take a look at the real example shared below with facts.
From the transaction shared in this post below, the right thing the government must do each time a consumer buys a service or a good is that all taxes and levies should be the statutory rate as a percentage of the actual cost of the goods or services bought. If that is the case, a purchase of GHS150.57 will lead to a total tax and levy of GHS33.10.
This will also add up to GHS183.70, being the total cost of goods bought by the customer (VAT and Levies inclusive) as shown below.
|What It should be|
|Tax and levy calculation||GHS|
|Subtotal (Without VAT and Levies)||150.57|
|COVID 19 LEVY||1.51|
|Total VAT & LEVY and Amount||183.70|
However, the government of Ghana charges GET Fund (2.5%), NHIS (2.5%), and COVID-19 LEVY (1%)= 6% on the cost of the purchase which in this case is GHS150.57.
This shoots up the amount the customer is supposed to pay GHS159.60 (which is the seller’s value plus Taxes.) Bear in mind that the customer did not go to the shop to buy VAT so you can not calculate other taxes and levies on VAT.
But that is what the government does. It now goes ahead to quote the GHS159.60 which has a TAX of 6% as a Subtotal then charges 15% VAT on it.
The basic question is, did the consumer go to the shop to buy an item called Get Fund, NHIS, and COVID-19 LEVY in addition to the GHS150.57? The answer is No, so why charge a tax on another tax/levy?
Below is the government’s calculation which leads to double taxing and stealing from the ordinary buyer.
The government of Ghana double-taxing Ghanaians Check the the calculations below.
|Government tax and levy calculation||Taxes and levies||GHS|
|Subtotal (Without VAT and Levies)||% charged as tax or levy||150.57|
|COVID 19 LEVY||1||1.51|
|Total VAT & LEVY and Amount||22||185.05|
The government’s double-taxing difference in percentages and money terms may look small however just a daily accumulation of these from daily transactions amounts to huge sums taken away from ordinary Ghanaians who are struggling to survive and pay several taxes imposed on them by the Nana Addo-led government.
It is only fair and ethical that this approach to calculating the indirect taxes and levies is corrected.
A lot is wrong with this and the government must urgently take action and correct the anomaly or explain in detail why the computation is done in the manner explained in this post which makes it a double taxing issue. The government is double taxing and “stealing” from Ghanaians, add your voice, and let us get this corrected.
Source: Wisdom Hammond