Yesterday, Joy News published a story on it’s wedsite with the title “Ghanaians to pay tax for COVID-19 ‘Free Water’ enjoyed to fill economic gap” and falsely attributed it to the Minister of Information, Hon. Kojo Oppong-Nkrumah ostensibly to give a propaganda message to the NDC to unduly attack the government as we have seen them do since the story was published.
At the outset, it must be stated that the story is misleading and does not capture the comments of the Minister within the exact context he made them, thereby giving a false impression altogether. Let me hasten to add that this unprofessional conduct of misreporting the Minister has been a persistent ploy by Joy News to cause undue disaffection for the Government and the Honorable Minister has complained about this severally yet Joy News has been adamant about it.
To understand the deliberate misreporting by Joy News, I have transcribed the relevant part of the interview between the Minister and Joy News Journalist, Evans Mensah below:Host: But you gave us that (free electricity and water) one hand and you are taking it with the other.Kojo Oppong-Nkrumah: No! We were in the midst of a crisis and the government had to front-load…{host interjects}Host:
But you said it’s free Kojo Oppong-Nkrumah: It was free to you (Ghanaians) but it wasn’t free to the treasury. When we say free electricity, it doesn’t mean the IPP producer is also going to say because the President said free electricity I won’t charge the people for it…{Host interjects}.Host: The people will have to pay for it {Minister retorts}Kojo Oppong-Nkrumah: the government will have to pay for it…{Host interjects}Host: I’m saying you are now, in 2021, you now want us to pay for it?Kojo Oppong-Nkrumah: I’m saying for example, the government had to borrow money, the fiscal impact of over ghc19 billion to make all those expenses happen. In addition to that, there is going to be expenses in the medium term because of COVID.
The government is asking a question, can we continue to accommodate this COVID black hole in this already widened gab (revenue and expenditure) of our finances or do we have to introduce a revenue handle to take care of it?
The government comes to the view that, with the greatest of respect, can we take 1% VAT to pay for that so COVID does not become an ever burdening expenditure item for us”.Objective Commentary The context within which the Minister made his submission on the 1% COVID-19 tax was the generally accepted view that borrowing to run a country is not sustainable and government must take steps to raise domestic revenue. The Minister touched on the lack of boldness on the part politicians, on both side of the divide, to educate the population that government needs money at this critical time and we can’t burry ourselves in debt financing so the rich must pay a little more taxes to enable government pursue a vigorous economic recovery program.
There was nowhere in the interview that the Minister intimated that taxes are being increased to pay for the free electricity and water enjoyed by Ghanaians in 2020.The defining parts of the interview relative to weather government is taxing Ghanaians to pay for the free electricity and water they enjoyed in 2020 are two and they are:1. When the Minister categorically answered the host that No, government has borrowed money to pay for those expenses already; it’s a fact that government received Rapid Credit Facility from IMF and World bank as well as Bank of Ghana to pay for COVID-19 related expenses.
Government also utilized part of the monies in the stabilization fund for said purposes.2. When the Minister said that COVID-19 related expenses is going to be with us at least for the medium term and it wouldn’t be healthy for our economy if we continue to borrow to make those expenses and not raise domestic revenue by taxing the rich a little more.
Government, in response to COVID-19, is making substantial recurrent and capital expenditures. For instance, government will continue to buy PPEs for health workers, procure Vaccines periodically etc. Also, government intend to undertake the biggest investment in the health sector at the back of COVID-19 – building 111 Hospitals including 3 Infectious Disease Control Centers.
These are huge expenditures that will be done in the short to medium term and that is why government is raising COVID-19 related taxes. It worth reiterating that the Minister never said that Ghanaians are being taxed for the free electricity and water they enjoyed in 2020. Ghanaians are being made to pay COVID-19 related tax because government needs to:1.
Build 111 Hospital including 3 Infectious Disease Control Centers2. Buy PPEs, Vaccines and other stuffs needed to fight the pandemic.3. Close the expenditure and revenue gap4. Keep the debt stock within sustainable limit.Cheers
Source: Charles Opoku – (Eastern Regional TESCON Coordinator)