Business in Ghana

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Charades in Acid. Critical News, 24th May 2015

Posted by Business in Ghana on May 25, 2015

Sydney Casely-Hayford, sydney@bizghana.com

This past week, we murdered a prominent politician, and our Finance Minister attempted a charade explanation of the economy.

Some sort of in fighting within the NPP created resentment and pent up sentiment that some person(s) decided the only way to settle this was to do an acid test on a human being. Gregory Afoko, brother to NPP National Chairman Paul Afoko was picked up by the police even as they investigate the matter. Some other person who could be his accomplice run away and has still not been found.

On his deathbed, Mr. Adams Mahama identified the two persons as his attackers.

Ghana has a history of political violence. We fought the British for independence, fought ourselves for independence and jailed, killed, maimed and deprived people of their livelihoods, all in the name of independence.

We also created a one party state in an attempt to annex all political control and in the after-process, staged a series of coup d’tats to show the world how confused we can be when it comes to violent democracy.

And all this violence has led to so much circumspection of our plight as a black people, we even turned lights off in Dansoman, where prominent actress, Yvonne Nelson, now famous for her #dumsormuststop night vigil was said to have been disconnected for illegally connecting her power supply.

Turns out not to be true, but there is some truth to the illegal connection, at least so says the estate owner albeit not by Yvonne.

But I say there is nothing like coincidence in the world. Just as ECG found illegal connections in the estate where Yvonne lives soon after she organized her “dumsor” demo, same way that Paul Afoko’s brother was fingered in the acid attack by the victim deemed to be at loggerheads with his brother, for no particularly good reason.

Except that tongues are tripping, many insiders mentioning names and feuds going back as as far as colonization, linking families that were not even prominent at that time, to serious problems of dominance, control and respect.

I don’t understand what all this is about, except there must be plenty money to chop once you are at the top.

What it does tell me, if we can close all the loopholes where money seeps to politicians, and make politicking unattractive, all this greed and power grabbing will cease once and for all and I wish we could do that.

But that has nothing to do with our Finance Minister.

He took to a public podium, to crow some, talk some and gesticulate some to Ghanaians, and I am not sure he wanted to claim victory that the economy is now back on track, but we are still building up to the great “medium term” prospects he has been preaching for the last three years.

I have never known a longer medium term evolution in all my life. Since all the money was taken from the consolidated fund in the name of single spine and other lame duck targets, we are progressing to medium term.

Mr. Terkper’s reasons for success derive from the fact that he is resplendent with joy that the IMF bailout program will translate to the donor partners releasing money for budgetary support.

Reading his concluding remarks after his presentation, this was the single most gleeful moment for him. Donors will rise and once more dip into their pockets to maintain Ghana’s rising appetite for corruption.

You see the problem with our donor partners, is each one of them worries that if they do not support the government, the other donor will step in and take their space. New initiatives are hard to come by, we have very little avenue to create new programs, most of them exhausted from decades of support with no tangible results and so they fight to maintain activity at home base.

But we are in a terrible quandary with our tax regime. I am not the first person to point this out, but I think with the fuel price increase, something must be said and done.

Our fuel taxes are a cascading tax, a turnover tax that is applied at every stage in the supply chain, without any deduction for the tax paid at earlier stages. Such taxes are distorting in that they create an artificial incentive for vertical integration. They have been replaced in Ghana and many other locations by a value added tax.

One of the primary goals of a taxation regime is always avoidance of “taxation over taxes” or “cascading-effect” of the incident taxes as it adds to the deadweight loss i.e. slump in total surplus of supply chain consisting of supplier, manufacturer, retailer and consumer.

The tax burden on fuel in Ghana is due to levies of variety of charges by the state and has raised the tax-burden on the retail pump price far beyond reason.

The regular Ghanaian finds himself strangled in a “terkper” knot of multiple tax-rates, laws and confused processes and often fails to comply with tax legislation. The extra tax paid due to taxation of the already taxed amount is finally born by the end consumer, which is common man and strikes them badly in addition-to inflation.

There are many further down the line transactions which come under the ambit of two or more taxes and the value of the second tax is calculated on the value arrived at by adding the value of first tax to the value of a previous transaction.

For example, the ex-refinery price of fuel attracts nine (9) different forms of tax, levies and duties – Excise duty, TOR recovery levy, Road Fund, Energy Fund, Exploration, Cross subsidy levy, Primary distribution margin, BOST margin and a Fuel marking margin. The sum of the ex-refinery price and these “taxes” makes the ex-depot price. These taxes are fixed by Parliament.

Six (6) additional “taxes” are loaded on to the cost of this ex-depot price after it has been taxed an additional time under ACT 879, the Special Petroleum Tax Act, introduced and assented into law on 19th November 2014.

This law adds 17.5% to the ex-depot price, taxing the already taxed ex-refinery price. And this is what cascades the price of the retail pump price, pushing it up from 216.97 pesewas per litre to 333.00 per litre as at 17th May 2015, which is what we are paying at the pump.

Government refuses to pass down the savings in the global crude oil price, rather choosing to increase the ex-pump price in order, as it says to satisfy the debt it owes to the Bulk Distribution Companies for exchange rate losses.

And Parliament in its infinite non-wisdom, agreed to the law and saddled the Ghanaian taxpayer with more costs in already precariously balanced home budgets.

So what are we gong to do? This week I have very few suggestions and no answers. I am disappointed that we have taken to this acid modus to maim and murder political opponents.

But Adams Mahama is not the only person who has made the news for an acid attack. A young couple with marriage plans. Male went to church and was told his wife was cheating on him. He went home, waited till she was in the shower, poured acid on her and run away. She is facially disfigured and is blind in both eyes. They were heading for a wedding within the month.

The pastor is still walking the streets in Ghana, an accomplice to a heinous disfigurement from a false seer of an innocent victim.

So while our Finance Minister is creating the impression that he has a handle on the state of our economy, charading with us and raising taxes wildly, we cheer with every lit moment after a dark vigil and praise ECG and Mahama for giving back to us, what was already ours and was taken away.

Nonplussed, we inaugurated Occupy Western Region over the weekend, very successfully, thanks to all our partners in Takoradi and we expect more to join as we look for like-minded Ghanaians willing to step forward and be counted.

Ghana, Aha a yε din papa. Alius atrox week advenio. Another terrible week to come!

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