Business News of Thursday, 2 March 2017
The head of the Economics Department of the University of Ghana has described as juicy the stimulus package announced by the Finance Minister in the 2017 Budget statement.
Peter Quartey told Joy News Editor Dzifa Bampoh that he was happy with some of the details of the budget, particularly the decision to abolish some of the taxes.
He made specific reference to the removal of taxes in the banking sector, on spare parts, and that imposed on head porters which he said would provide greater relief to the persons involved, especially the porters who earn below the minimum wage.
He was however quick to advice the government to manage the expectations of Ghanaians in the implementation of the tax reprieves.
The citizenry were bombarded with taxes under the previous NDC administration as a measure to raise revenue for government business.
At a point, taxes were imposed on condoms, machetes, raw materials imported, and several other goods and services.
The NPP while in opposition complained about the taxes, some of which it referred to as nuisance taxes.
With the many promises made by the NPP in opposition, promises which had huge capital implications, it was curious how government intended to cut and abolish taxes and still expect to raise revenue to execute many of its promises.
Critics, particularly the NDC insisted it was unwise for government to withdraw those taxes but when he mounted the podium, before 275 MPs directed by the Speaker of Parliament, the Finance Minister Ken Ofori Atta made good the promise by the NPP to review a number of taxes imposed by the previous government.
In all, about eight taxes were abolished and four others were re-adjusted for the 2017 financial year.
Some of the abolished taxes include one percent special import levy, 17.5 VAT on financial services, 17.5% VAT on selected imported medicines, remove import duties on raw materials and machinery and abolish 17.5 VAT on domestic airline tickets and 5% VAT on real estates will also be abolished.
The NDC has been quick to disparage the content of the package with some MPs describing it as populist and deceptive.
But reacting to the details of the budget, Peter Quartey said the budget gave hope to a large extent.
He was however quick to point out that the impact of the budget will depend on how Ghanaians respond to it.
He said if the response is positive the outcome will benefit all and vice versa. He was vehement in his criticism of the free SHS policy which he believes was not targeting in nature.
He did not understand why government will seek to subsidize the fees for some well to do children in some of the popular SHS in the country.
He was also happy with the decision by the government to review the tax exemption policy which he believed was abused at some point.
He said if government is able to reduce waste in the system through the prosecutorial powers of the Independent prosecutor, that will save the country some resources which would otherwise have ended up in people’s pockets.