The new tax bills that are currently before Parliament have been defended by the deputy minister of finance, Abena Osei Asare.
She maintains that the government urgently requires the new tax bills to support its initiative to raise money in an effort to strengthen the fragile economy.
Today, March 23, Parliament will vote on the Growth and Sustainability Levy Bill, the Excise Duty, and the Excise Tax Stamp (Amendment) Bills.
The Board’s approval of the staff-level agreement for the $3 billion International Monetary Fund (IMF) Programme would be made easier with the approval of these pending revenue mobilization bills.
Abena Osei Asare said the new measures if approved by Parliament, will also enable the government to provide aid to needy individuals who have been adversely affected by the consequences of Covid-19 and the Russia-Ukraine war, while in an interview on the Citi Morning Show on Thursday.
“This is to support the economy to get back on track and implement the agenda of supporting the vulnerable who have been hit hard by Covid-19 and the Russia-Ukraine war. Inasmuch as we are raising revenue, we also need to look at the vulnerable who have been hit hard and these are the revenues that we believe that if we raise we can use some to support them.”
Meeting IMF conditionalities
The approval of the three Acts, according to the deputy finance minister, will also help accelerate attempts to raise the tax-to-GDP ratio from below 13% to the sub-Saharan average of 18%.
“As a country, we need to mobilise our own domestic revenue to pursue our own national development agenda and so these are some of the things we can do to raise revenue. As we speak if you compare the revenue we raise to our GDP we are still way below the West African target of below 16 to 18 percent we are still doing 13 percent and so there is more that we feel we can do,” the MP for Atiwa East told host Bernard Avle.
The Public Utilities Regulatory Commission’s (PURC) tariff adjustment, the publication of the Auditor-Report General’s on COVID-19 spending, and the onboarding of the Ghana Education Trust Fund (GETFund), District Assemblies Common Fund (DACF), and Road Fund on Ghana’s integrated financial management information system are all actions taken by the government to comply with the IMF’s requirements in order to be eligible for a bailout (GIFMIS).
Due to the closure of the domestic and foreign bond markets, the government must rely on Treasury Bills and low-interest loans as its main sources of funding for the fiscal year 2023.
Hence, for the country to emerge from the current economic crisis, Parliament must carefully evaluate and approve fiscal measures.