More Wahala Terkper Presents Budget Today
By Emmanuel Akli
Barring any last minute hitches, the Minister of Finance, Mr. Seth Terkper will be presenting the budget statement to Parliament this morning. The budget would outline government spending and expected revenue for the fiscal year.
Intelligence reports picked up by The Chronicle indicate that John Dramani Mahama’s government intends placing a temporary injunction on tax increment in all sectors of the economy.
The reason for such a decision is very sketchy, but this reporter gathered that the decision might have been borne out of the recent increment in fuel prices.
The Chronicle, however, gathered that the government is going to announce new measures that would rope in all those operating outside the tax net, to ensure that enough domestic revenue is collected.
This reporter was told that the government would focus particular attention on the collection of property tax.
Though the sector has the potential to rake in millions of Ghana Cedis revenue it has always under-performed. Last year, the government ran a budget deficit of 12% of the Gross Domestic Product (GDP), which put a strain on the economy.
Recently, a former Deputy Governor of the Bank of Ghana, Dr. Mahamudu Bawumiah, issued a statement criticizing the government for running such a deficit, which amounted to GH¢8 billion. According to Bawumiah, the amount could have been used to fund the free secondary education concept Nana Addo was espousing.
The government has so far not denied running such a deficit, but pointed out that the New Patriotic Party (NPP) government also ran a budget deficit of 6% to the GDP, at the time the size of the economy was GH¢35 billion.
According to Mahama’s government, they had doubled the size of the economy, therefore, the 12% deficit they recorded was not out of the ordinary. Despite this counter argument, the government still plans to cut back on expenditure and increase revenue by ensuring efficiency in tax collections this fiscal year.
Mr. Franklin Cudjoe, founding President of Imani Ghana, is meanwhile, suggesting the scraping of income tax and instead increase the Value Added Tax (VAT).
According to him, most working Ghanaians do not pay income tax and that they cannot dodge paying the enhanced VAT, if the rate is increased, as is being suggested. It is, however, not known if the government would accept the suggestion and scrap the income tax.
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