The maiden budget statement of the Akufo-Addo-Bawumia government delivered Thursday by Finance Minister, Ken Ofori-Atta is misleading and bereft of specificity, members of the minority in parliament have said.
“This budget is very deceptive. It is populist. It doesn’t preserve the medium term objective of this country,” a former Deputy Finance Minister, Cassiel Ato Forson, said of the budget in an interview with the media.
He warned that Ghanaians should brace themselves for a difficult medium term challenges ahead of them.
Presenting the abridged version of the government’s 2017 budget statement before Parliament Thursday March 2, 2017, Mr. Ken Ofori-Atta announced the expulsion of several taxes it labeled as irritants.
“A number of tax measures have been introduced in recent years in an attempt to deal with revenue shortfalls. Some have proven to be nuisance taxes,” he said.
According to him, they [taxes] have no revenue yielding potential, burdening the private sector and the average Ghanaian.
The taxes abolished, he said are; The 1% Special Import Levy – Kayayei market tolls – 17.5% VAT/NHIL on financial services – 17.5% VAT/NHIL on selected imported medicines that are not produced locally – 17.5% VAT/NHIL on domestic airline tickets – Duty on imported spare parts – 5% VAT/NHIL on Real estate sales – Exercise duty on petroleum
Also, he said corporate income tax will be progressively reduced from 25% to 20% in 2018, 17.5% of VAT/NHIL will be replaced with 3% flat rate for traders as well as Tax credits and other incentives for businesses that hire young graduates from tertiary institutions – Tax incentives for young entrepreneurs and Reduce special petroleum tax rate from 17.5% to 15%.
Mr. Ofori-Atta said the cuts are part of “our commitment to re-energize the private sector, the government has decided, as pledged, to review these taxes to provide relief for business. ”
But Mr. Forson, who is also a ranking member on the Finance Committee of Parliament, disagreed, arguing that the announcement by Mr. Ofori-Atta will further cripple the economy.
He said “if you want to lift the burden… the so called burden importers I would have challenged him and I still challenge him to come out to say that they are removing the two-percent component of the special import levy.
“The people of Ghana expect that the least you can do is to at least be honourable enough to let them know that we promised this, but we are not able to do it,” said Fifi Kwetey, the Member of Parliament for Ketu South.
Also, the member of parliament for Ningo-Prampram, Sam George said the figures given by the finance Minister are characterized by inconsistencies.