not and would not increase VAT, but on page 3, Government has realigned VAT, so this is realigned VAT.
In the first paragraph of the Committee's Report, I beg to quote; “the estimated impact on VAT revenue as a result of the realignment…”
So in this country, the people of Ghana deserve to know that there is a VAT realignment or a VAT adjustment. Interestingly and coincidentally, that realignment and readjustment results in a revenue of GH¢ 285 million.
Mr Speaker, when you have a tax of 17.5 per cent input VAT that is purchased, and you want to come to output tax, that is sales, so between the input and output, who is responsible for the five per cent? We need answers from the Government of Ghana.
Between the 17.5 per cent and 12.5 per cent, it is five per cent. That five per cent is no longer on input. It necessarily would be on output, and output would be sales. Input is purchase.
So, Mr Speaker, let them accept it or not. I would submit a table to the Table Office to be captured. Eventually, VAT which would be paid by Ghanaian businesses would be 22.5 per cent. Let them dismiss it on this Floor that this would not happen.
When they came here for VAT flat rate and the Hon Ranking Member and others cautioned them, they said no, the Minority was not thinking outside the box. The Abossey Okai traders now think inside the box.
They know what this VAT means for them, so if they come and say they have
moved 17.5 per cent to 12.5 per cent, posterity and the traders in the market would judge them in the coming days.
A principle and canon of taxation is certainty; it is trite economics, thanks to Adam Smith. I hope I quoted him right. They are not creating certainty in the sight of Ghanaians and Ghanaian businesses on what tax they would pay relative to
In one breath, they have not increased it, but they expect increase in revenue. If realignment results in increases, let it be good economics if VAT realignment and VAT adjustment would bring in income.
Mr Speaker, the second point is that in all of it, whether GETFund or NHIA as we have discussed, and I repeat it, I would give them a table. If they were doing a purchase of GH¢100, maybe 7.5 per cent VAT on that GH¢100 would still give you 17.5 per cent of it.
Now if you come to do output tax, that would be on sales. No businessman would fail to transfer a threat to his cost. A threat to his profitability is easily transferable to the consumer, and that is what they would do, so this 5 per cent would be easily transferred to Ghanaian businesses and Ghanaian consumers, simple economics.
They could argue this evening that they are right, but when they begin charging, the Ghanaian consumer and the Ghanaian business would know there was a realignment and adjustment of VAT which is bringing -- Mr Speaker, let me use the work of your Committee to conclude. Between the flat rate, 17.5 per cent input VAT, they say 12.5 per cent, so the 5 per cent, who would pay that? Answer that.
It would be borne because it would be transferred by businesses to consumers, yet they say we should not call that increase, we should call it realignment.
Mr Speaker, finally, we could understand that Government needs revenue because they need liquidity and money for the implementation of its major flagship projects, including Free SHS, but when they adjust VAT and it results in an increase in tax revenue, and they are not dedicating that increase to what they themselves describe as distress -- National Health Insurance is in distress, GETFund is in distress, because they have not paid contractors that they owe relative to GETFund, NHIS, phar- maceutical groups and others have not been paid because of distress, yet in all of it they are going to get additional revenue of GH¢ 285 million.
Instead of dedicating it to the Fund, they are taking it as budget support, and they say we should hail them that this is good economics.
Mr Speaker, when were the Funds established? They should go back to the history of the GETFund. It was earmarked because we wanted to expand tertiary education. As I speak to you, University Teachers Association of Ghana is threatening a strike action against Government because of book and research allowances.
So even if they gave this adjustment or realigned revenue coming from VAT to pay university teachers' research allowances, it would be understandable, but they are taking it to budget and saying that GETFund -- [Interruption.] So, Hon Minister, challenge me if GETFund is not
in distress and whether even projects that they are supposed to do they are able to do it.
Mr Speaker, I could say same for the National Health Insurance. Every day, they create an impression to the world that the National Health Insurance is comatose.
Dr Twum-Nuamah, it is the same National Health Insurance you have said the people from other countries have come to learn. They do not travel to learn bad things. If it were not good, people would not travel to come and learn.
Finally, Mr Speaker, to our Hon Colleagues on the opposite Side, every time they say the NDC was in Government as if they have never been in Government. They have been there before.
Did they resolve the problems of the country between 2001 and 2008? They should not create an impression every day that because NDC -- They could have done it. They got the opportunity to rule. Did they do it? So, let us get it.
We know they are in distress that is why they are coming in through the backdoor with some tax and borrowing measures. Mr Speaker, in principle, they want a realignment or a readjustment, but in our words, it is a backdoor increase in VAT because I cannot see how a tax instrument could yield GH¢285 million and mathematically, it is not an increase.
They are just confusing Ghanaians between output which is based on sales and input which is based on purchase, and I am saying that someone would be responsible for the five per cent. That someone would be those businesses that would transfer it to consumers.