{"id":748208,"date":"2019-11-20T11:45:06","date_gmt":"2019-11-20T11:45:06","guid":{"rendered":"https:\/\/ghana-mma.com\/2019\/11\/20\/budget-should-have-introduced-taxes\/"},"modified":"2019-11-20T11:45:06","modified_gmt":"2019-11-20T11:45:06","slug":"budget-should-have-introduced-taxes","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2019\/11\/20\/budget-should-have-introduced-taxes\/","title":{"rendered":"\u2018Budget Should Have Introduced Taxes\u2019"},"content":{"rendered":"

<\/p>\n

\n

Dr. John Kwakye<\/strong><\/p>\n

THE
\nINSTITUTE of Economic Affairs (IEA) is not happy that government did not
\nintroduce taxes in its 2020 budget presented to Parliament recently.<\/p>\n

According
\nto Dr John Kwakye, director of research at IEA, government should have
\nconsidered raising some taxes, especially in the banking sector. He stressed
\nthat \u201cyou need to mobilize more resources to support national
\ndevelopment.\u201d<\/p>\n

Dr
\nKwakye, who was speaking Tuesday, in Accra, at a press conference organised by
\nIEA, said the 2020 Budget also lacked policies that would bring about fundamental
\nchanges that were needed to propel Ghana\u2019s development over the medium term.<\/p>\n

He
\nsaid the Finance Minister was cautious with the 2020 budget because he endeavored
\nto walk a tight rope between stabilization and growth.<\/p>\n

Comparing
\ngovernment\u2019s total revenue and grants of GH\u00a267.1 billion for 2020 which
\nrepresented 16. 9\u2105 of GDP to the 2019 figure of GH\u00a254.6 billion (15.8\u2105 of GDP),
\nhe said \u201cthe revenue, capital expenditure and growth targets are not
\nsufficiently ambitious.\u201d<\/p>\n

He
\ncontinued that the Finance Minister tweaked figures to stay within the FRA
\n(Fiscal Responsibility Act)\u201d adding that the approach adopted, as always,
\nappeared to be defined by political sensitivities.<\/p>\n

He
\nsaid such sensitivities seemed to dictate caution, which might not, however,
\nlead to optimal socioeconomic outcomes that required more ambition to achieve.<\/p>\n

Impact On Economic Growth<\/strong><\/p>\n

He
\nalso said the budget focused more on economic stabilization or consolidation
\nrather than revenue mobilization and expenditure which he said had serious
\nimpact on economic growth.<\/p>\n

He
\nadded that over the last three years capital expenditure has been depressed,
\nreason for the bad roads and schools.<\/p>\n

\u201cOur
\nreading of the budget shows that the allocation for infrastructure will still
\nnot be enough,\u201d he lamented.<\/p>\n

According
\nto him, if care was not taken the economy could fall in the sub-optimal
\nequilibrium level.<\/p>\n

He
\nbemoaned that over the last few years, government had been trying to
\nconsolidate the economy due to the 2016 overrun.<\/p>\n

Tepid Revenue Effort<\/strong><\/p>\n

Commenting
\non the fiscal deficit for 2019 which has been maintained at 4.7\u2105 for 2020, Dr
\nKwakye said over the medium term, the deficit would fall to 3.0\u2105, which was the
\nECOWAS convergence ceiling, by 2023.<\/p>\n

However,
\nthe IEA said \u201cthe revenue effort is rather tepid.\u201d<\/p>\n

On
\nthe domestic revenue to GDP of 16.5\u2105 which averaged 15.9\u2105 for 2021-2023, he
\nsaid figures for middle-income countries stood about 30\u2105 and 25\u2105 respectively.<\/p>\n

The
\nFinance Minister revealed that government was supporting the Ghana Revenue
\nAuthority (GRA) reforms agenda which was largely targeted at tax
\nadministration.<\/p>\n

On
\nsuch reforms, which Dr. Kwakye said did not reflect in significantly better
\nrevenue outcomes, he noted:\u00a0 \u201cThe
\nMinister could have taken bolder steps to mobilize revenue, including through a
\nreduction of the spate of exemption as well as effective assessment and
\ncollection of property taxes.\u201d<\/p>\n

He
\nadded that expenditure was equally constrained by revenue limitations.<\/p>\n

BY Melvin Tarlue <\/strong><\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

Dr. John Kwakye THE INSTITUTE of Economic Affairs (IEA) is not happy that government did not introduce taxes in its 2020 budget presented to Parliament recently. According to Dr John Kwakye, director of research at IEA, government should have considered raising some taxes, especially in the banking sector. He stressed that \u201cyou need to mobilize […]<\/p>\n","protected":false},"author":1,"featured_media":748209,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":["post-748208","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business"],"yoast_head":"\n\u2018Budget Should Have Introduced Taxes\u2019 - Ghanamma.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ghanamma.com\/2019\/11\/20\/budget-should-have-introduced-taxes\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"\u2018Budget Should Have Introduced Taxes\u2019 - Ghanamma.com\" \/>\n<meta name=\"twitter:description\" content=\"Dr. John Kwakye THE INSTITUTE of Economic Affairs (IEA) is not happy that government did not introduce taxes in its 2020 budget presented to Parliament recently. 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