Government’s introduction of a new tax law, which will impose a 15 per cent tax on pension investments, has been met with opposition from the National Pensioners Association.
Benjamin Essuman, a key negotiator for the association, has said the tax is not fair given the dwindling strength of the local currency, the cedi.
He lamented: “I don’t think it is fair. It is not fair at all. In the first place our pension keeps running down as a result of inflation. Evidently we are not benefiting from the economy in any way. We have contributed all over the years and if it should be taxed again, it is not fair at all.”
The introduction of the law was announced by Finance Minister Seth Terkper at a roundtable on Tuesday May 31 where it came to light that allowances are also captured as income under the law and subject to taxation.
Mr Essuman, who represents pensioners at the National Pensions Regulatory Authority (NPRA), maintains that government did not consult the association in any way over the proposed tax and called on it to rescind its decision.
“We are not aware and have not been consulted. The NPRA has also not informed me about it. That will be very unfair because our pensions keep running down as a result of inflation. Evidently, we are not benefiting from the economy in any way. We have contributed over the years and that will be so unfair,” he said.
He admitted that over the years, there had not been any tax component of pensions and “in many countries across the world, pensions are not taxed because pensions are not up to the economic values that people can live up with”.
“In Ghana the way the pensions are indexed, they do not consider the real market value, they have their parameters, which are far below its rate of inflation and something needs to be done about the indexing. So, to go ahead and tax pensioners, I think that will be too much,” he told Accra-based Joy FM on Wednesday June 1, 2016.