Mid-year budget review to be presented this week
Adnan Adams Mohammed
The Finance Minister, this week present the mid-year budget review to Parliament.
As government has initiated discussion with the International Monetary Fund (IMF), many Ghanaians and policy analyst expect tough economic policy changes, especially with cutting down on expenditure and possible cancellation of many social intervention programs as well as how to increase domestic revenue generation.
The government indicated it has started an engagement with the IMF to seek ‘balance of payment support’ as part of a broader effort to quicken Ghana’s build back in the face of challenges induced by the Covid-19 pandemic and, recently, the Russia Ukraine crises.” The Ghana Union of Traders’ Association (GUTA) has once again underscored the need for government to review the tax exemption regime to curtail revenue losses in the mid-year budget.
According to the Association, there is a lack of urgency in the way the exemption bill is being treated despite indications that the government’s latest revenue generation strategy, the electronic transfer levy, is woefully failing to meet government targets.
“We find it difficult to understand why they are still not being able to revise the tax exemption policy. It is not helping anybody, including the government. We need taxes to grow, and the tax exemption policy has not helped”, President of GUTA, Dr. Joseph Obeng said in an interview last week. “If anything, it has not helped to create employment. This tax exemption is going to help foreigners. What do we have to show if it doesn’t reflect on employment creation? It needs to be looked at as soon as possible, especially as government is going to the IMF program. They should rethink through and do something about it.”
The call by GUTA follows calls by many stakeholders to government to put in place measures to ensure the State is not deprived of billions of cedis, through tax exemptions every year.
The Tax Exemptions Bill was laid in Parliament in the first quarter of 2019 to, among other things, “rationalise the current exemptions regime on taxes, levies, fees and charges by varying, where necessary, and consolidating existing statutory provisions on tax and other exemptions and to provide for the administration of exemptions”.
But since then, nothing has been done. In November last year, the Minister of State at the Ministry of Finance, Charles Adu Boahen, announced that plans were far advanced for the passage of the Tax Exemptions Bill.
According to him, Cabinet is deliberating on the final draft of the Bill.
Already, data from the Institute for Economic Affairs (IEA), shows that Ghana loses over GHC 5 billion every year through tax exemptions alone.