IEA defends proposal to increase VAT by 1% to fund free SHS

The Programmes Officer at the Institute of Economic Affairs, Dr Frankie Asare-Donkor says the IEA proposal for a one percent increase in VAT to fund the free SHS is to ensure the sustainability of the policy. 

He said though the one percent will impose a bit of a burden on Ghanaians, it will be in the best interest of all to ensure sustainable funding sources for the programme in order not to suffer a setback.  

Speaking to Radio Ghana, Dr Asare-Donkor said the country cannot depend on donor funding for the free SHS, hence the need for Ghanaians to take up the funding.

Dr Asare Donkor also suggested that the Auditor General must plug all the loopholes in the revenue generation mix to help government implement some key policy decisions.

Meanwhile, the Head of the Finance Department University of Ghana Business School, Dr. Godfred Alufa Bokpin says though the proposal by the IEA to increase the VAT by one percent to finance the free SHS is commendable it is early days yet and other sources of funding must be looked at. 

He said sustainable funding is key and the VAT policy is one of the surest ways of funding the free SHS.  

Dr. Bokpin said it is important government and all the relevant stakeholders debate the issue and come to a logical conclusion as to how the free SHS must be funded.


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