Approval Of IMF Deal To Lead To Increase In Taxes For Businesses & Individuals – Prof. Bokpin Warns

Approval Of IMF Deal To Lead To Increase In Taxes For Businesses & Individuals – Prof. Bokpin Warns

Following the International Monetary Fund’s board approval of Ghana’s bailout program, Economist and Senior Lecturer at the University of Ghana, Professor Godfred Alufar Bokpin has revealed some worrying downsides of the IMF program.

A press release by the International Monetary Fund announced the approval of Ghana’s request adding that deal will ensure the disbursement of $3 billion to the government in tranches to support the economy.

Despite the good news, Professor Godfred Bokpin has revealed that the deal will result in an astronomical increase in taxes for businesses as well as individuals.

Speaking on Accra-based JoyNews, the economist warned Ghanaians not to be too optimistic as far as the IMF assistance is concerned.

He explained that the imminent increase in taxes is inevitable since the government will have to meet a certain tax-to-GDP ratio as part of the conditionalities of the program.

“There are targets that we have to meet every six months of the program review. Part of the target may include increasing our tax-to-GDP ratio to let’s say 18%. The strategy in increasing the tax revenue could negatively impact businesses if we don’t adopt optimal tax handles,” Prof Bokpin said.

In a press release by the IMF, they indicated that this decision will enable an immediate disbursement of about US$600 million to Ghana.

“The program is based on the government’s Post COVID-19 Program for Economic Growth (PC-PEG), which aims to restore macroeconomic stability and debt sustainability and includes wide-ranging reforms to build resilience and lay the foundation for stronger and more inclusive growth,” parts of the statement read.


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