Ghanaians welcome 2015 Budget

Seth Terpker, Finance Minister.
Seth Terpker, Finance Minister.

Ghana?s successful structural transformation rests on three strategic interventions, one of which is the strengthening and deepening of the essential elements and institutions of good governancewpid-seth-terkper.jpg

The others are, promoting export-led growth through products that build up on Ghana?s comparative strength in agricultural raw materials, and anchoring industrial development through prudent use of natural resources based on locally processed value addition.

Finance Minister Seth Terkper stated these on Wednesday when he presented the 2015 Budget Statement to Parliament in Accra.

He said the budget had been developed within the broad framework of the Ghana Shared Growth and Development Agenda (GSGDA II), 2014-2017, whose medium term vision is: ?A stable, united, inclusive and prosperous country with opportunities for all?.

He said the GSGDA II will be linked to Ministry of Finance?s database, the medium term expenditure and budget through the GIFMIS structures.

The Finance Minister stated that the medium term fiscal policy of Government will focus on managing volatilities for a smooth near-term. We will continue to pursue the fundamental policies and measures we have been implementing for some time now.

?Government is committed to addressing the short term vulnerabilities that the economy faces to safeguard the nation?s bright future … Our goal for the medium term is to progressively reduce the fiscal deficit to 3.5 percent of GDP by 2017.?

He said this reduction will be driven mainly by improvements in tax policy, revenue administration reforms, improved management of public funds, expenditure rationalization, and the implementation of new debt management strategies.

Mr Terkper further stated that in 2015, Government will implement the remaining VAT measures for fee-based financial services and commercial real estate with a change in the VAT on real estate to a flat 5 percent which the House had already passed.

In addition, he said, Government was proposing a number of tax measures for implementation in 2015.

These include the Imposition of Special Petroleum Tax of 17.5 percent as part of a rationalization of VAT regime and change in the petroleum pricing structure; a reversal of the excise tax on petroleum from ad valorem to specific; and the extension of the National Fiscal Stabilization Levy of 5 per cent, introduction of a special import levy of between one and two per cent up to 2017; and an increase of the withholding tax on Directors? remuneration from 10 per cent to 20 per cent.

On inflation, the Finance Minister said price pressures had been largely contained, with Consumer Price Index (CPI) inflation generally below targets in advanced economies, and that in emerging market and developing economies, inflation is projected to decline to 5.5 percent in 2014, down from 5.9 percent in 2013.

The figure remained broadly unchanged in 2015, largely on account of the softening of commodity prices, particularly food commodities, which have a high weight in the consumer price index baskets for these countries, he added.

Download Budget Speech and Highlight below

BUDGET SPEECH_Seth 19 Nov 14_Final (3)



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