Ghana - Politics, government, and taxation
Ghana is a former British colony. Kwame Nkrumah set up the Convention Peoples Party (CPP) to campaign for independence in 1949. Elections took place in 1951 and the following year Nkrumah became the leader of the executive council and the legislature. Full independence followed in 1957, with Ghana becoming the first country in Africa to achieve this feat. Ghana became a republic on 1 July 1960, with Nkrumah as president.
In 1964 Nkrumah introduced legislation to make Ghana a one-party state. In 1966 Nkrumah was removed by military coup, making way for army leadership under the umbrella of the National Liberation Council (NLC), headed by 3 army officers. Political activity was permitted again in 1969, elections were held, and the Progress Party (PP) won a majority of seats. The leader of the PP, Dr. Kofi Busia, was invited to form a government and became prime minister. A 3-man commission of Emanuel Kotoka, Akwasi Arifa, and John Harley from the NLC acted as head of state.
In 1972 there was another military coup led by Col. Ignatius Acheampong, and he set up a National Redemption Council (NDC). In 1978 Gen. Fredrick Akuffo replaced Acheampong as head of what was now the Supreme Military Council (SMC), and in 1979 political activity began in preparation for elections scheduled for June. Two weeks before the election, however, a military coup led by Flight Lt. Jerry Rawlings ushered in the leadership of the Armed Forces Revolutionary Council (AFRC). Elections were held as scheduled, and Dr. Hilla Limann of the Peoples National Party (PNP) took office as president in September 1979.
Another coup, in 1981, put Rawlings back in power. He suspended the constitution and banned political activity. From December 1981 to November 1992 a Provisional National Defence Council (PNDC), with secretaries in charge of the ministries and the regions, ruled Ghana. A new constitution was approved by a national referendum in April 1992, based on the U.S. model. The PNDC formed a new party, the National Democratic Congress (NDC), and successfully contested the elections in December 1992 with Rawlings emerging as the president. In the 1996 elections, NDC and Rawlings were again returned to office. Rawlings stood down for the 2000 elections, and the New Patriotic Party, with John Kufuor as presidential candidate, was victorious.
The 1992 constitution makes Ghana a unitary republic with an executive president and a multiparty political system. The national legislature is the unicameral parliament, whose 200 members are elected by universal adult suffrage every 4 years. The president, who is the head of state and commander-in-chief of the armed forces, is elected by universal adult suffrage for a maximum of 2 4-year terms.
The president appoints the vice president and nominates a council of ministers, subject to approval by parliament. The constitution also provides for 2 advisory bodies to the president: a 25-member Council of State and a 20-member National Security Council. There are 110 administrative districts, each having a District Assembly.
In 1996 government revenues amounted to 21 percent of GDP and expenditures were 22 percent of GDP. The budget deficit was 1.2 percent of GDP, well within the 3 percent guidelines. The most recent year for which tax revenue data is available is 1993, when taxes in income, profits, and capital gains generated 17 percent of government revenue, domestic taxes on goods and services 40 percent, export levies and import duties 27 percent, and non-tax revenue 23 percent.
The general rate of corporation tax is 35 percent, and there is a capital gains tax of 5 percent. Hotels are subject to a 25 percent corporation tax, manufacturing companies in the regional capitals are subject to 26.25 percent, elsewhere at 17.5 percent. Interest and dividends are subject to a 10 percent withholding tax. Non-agricultural exports are subject to an 8 percent levy.