‘You’ll Kill Local Businesses’: Afenyo-Markin Fights 7% Withholding Tax Increase in Parliament
Accra, Ghana — Minority Leader Alexander Afenyo-Markin has cautioned Parliament against approving a proposed increase in Ghana’s withholding tax rate from 3% to 7%, warning that the measure would cripple small and medium-scale enterprises (SMEs) already struggling with limited access to capital.
Speaking during deliberations on the 2026 tax amendment bill on Tuesday, November 25, the Effutu MP argued that while larger corporations could absorb the rate hike, the same could not be said for local entrepreneurs and family-owned businesses that rely heavily on informal credit systems to stay afloat.
“Mr. Speaker, many businesses, especially our small and medium enterprises that are Ghanaian-owned, have serious issues with capital,” he said. “They take loans from the informal sector to finance their businesses. Currently, withholding tax is 3%. If I’m getting payment and you are withholding as much as 7%, that is punitive. You are holding my capital.”
The legislator urged the House to maintain the current 3% rate, describing the proposed hike as “anti-business” and counterproductive to the government’s stated goal of promoting entrepreneurship and job creation.
“How many people make even 10% profit on sales? If now we want to increase it to 7%, no, we will be killing local business because their profit margins are very low,” he warned. “It is only the big companies that can meet the conditions to have exemption.”
Afenyo-Markin reminded Parliament that withholding tax rates had been reduced in the early 2000s under the Kufuor administration, following complaints from the private sector about liquidity challenges. “Let’s not rush and just increase to 7% because it used to be 10% and it got reduced way back in Kufuor’s time,” he said. “If we take it to 7% now, we will be creating more problems for local enterprises.”
He further proposed a formal amendment to Clause 561A of the bill, calling for the deletion of “7%” and the insertion of “3%” to preserve the existing rate. “Those of you who are entrepreneurs in this chamber know the real challenges you face. The small and medium-scale enterprises, the beginners, need their revenue to reinvest. Let’s maintain the 3%,” he appealed.
Afenyo-Markin also noted that ongoing digitalization and tax efficiency reforms would improve compliance without the need for punitive tax hikes.
“The new system of efficiency being introduced will encourage more people to pay. But if you take it to 7%, only multinational companies will continue to benefit because they already have capital. You and I, our small businesses will continue to suffer.”
The debate forms part of ongoing fiscal reforms under the 2026 Budget and Economic Policy Statement, which has sparked nationwide discussion about the government’s approach to balancing revenue generation with private sector growth.
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