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High taxes Why Mahama is taxing condoms, cutlasses - Bawumia explains

Dr Bawumia’s comments come at the back of agitation by the various traders union who have embarked on a three-day strike over tax and tariff hikes

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Dr. Mahamadu Bawumia , NPP running mate play

Dr. Mahamadu Bawumia, NPP running mate

Running mate of the New Patriotic Party (NPP) Dr Mahamudu Bawumia has criticised the government for imposing high taxes on businesses which he believes could undermine economic growth.

Dr Bawumia said the government had mismanaged the economy to a point where it had to rely desperately on raising taxes to generate revenue.

Read more: Bawumia backs Otabil's criticism of government

He said: "You have a government where you have cutlasses being taxed; condoms being taxed…. When you become desperate, this is what happens; and when you mismanage the economy into this hole then, anything sounds great to you. You don’t have any option and this is the problem.

Speaking on Accra-based Joy FM  on Wednesday, March 2, 2016, he said, "Anything that is taxable and that can feasibly be taxed, they are trying to impose tax on them. All of these are hurting the economy and therefore you are not going to get the growth, and when you don’t get the growth, you will not get the revenue, and when you don’t get the revenue, you go back to increasing taxes to get the revenue, and then you are in a cyclical downward spiral. So they have it wrong and we’ll change that particular policy."

Read related: Tariff New ECOWAS Common External Tariff takes effect

Parliament in 2013 okayed the government's request to tax certain items; including condoms, cutlasses, outboard motors, book binding machines and fishing nets among many others, at the point of entry, under the Special Import Levy Bill.

Dr Bawumia’s comments come at the back of agitation by the various traders union who have embarked on a three-day strike over tax and tariff hikes, which they say are crippling their businesses.

Click for more: Parliament to grill Terkper over suspended 1% tax on interests

They include; The Ghana Union of Traders’ Association (GUTA), Food and Beverages Importers Association, Ghana Automobile Distributors Association (GADA), Importers and Exporters Association of Ghana, Ghana Institute of Freight Forwarders (GIFF), Freight Forwarders Association and the Customs Brokers Association of Ghana who are  also unhappy with the ECOWAS Common External Tariff which took effect in  February, and have consequently closed down shops in the Central Business District of the capital.

The table below shows condom use and expenditure trends for public and private sectors from 2011-2015

 

2011

2012

2013

2014

2015

Total number of condoms from private sources

6,784,172

5,255,980

12,066,247

13,641,333

16,434,733

Total number of condoms from public sources

61,144,206

24,838,858

80,128,691

68,928,512

75,391,161

Percentage of private sector market

10%

17%

13%

17%

18%

Total forecasted cost of procuring condoms (2013-2015)

$ 3,505,939

$ 3,842,727

$ 3,883,957

Total cost of procuring condoms for private sector (2013-2015)

$ 458,849

$ 579,215

$ 627,483

1% of total income from Public & Private sectors

$ 4,588.49

$ 5,792.15

$ 6,274.83

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