Deputy Minister of Finance, Abena Osei Asare, has justified the new tax bills currently before Parliament insisting that the new tax bills are urgently needed to shore up the government’s revenue mobilisation agenda to revive the ailing economy.
Parliament will today, March 23, vote on the Income Tax (Amendment) Bill, Excise Duty and Excise Tax Stamp (Amendment) Bills as well as the Growth and Sustainability Levy Bill.
Approval of these outstanding revenue mobilisation bills will facilitate the Board Approval for the $3 billion International Monetary Fund (IMF) Programme staff-level agreement.
Speaking on the Citi Breakfast Show on Thursday, Abena Osei Asare said the new bills when passed by Parliament will also help the government provide aid to vulnerable people severely impacted by the effects of Covid-19 and the Russia-Ukriane war.
“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.”
The deputy Finance Minister added that the passage of the three Bills is also necessary for effective Budget implementation as well as boosting efforts at increasing Tax-to-GDP from less than 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.
As part of measures to meet the criteria set by the IMF to qualify for a bailout, the government has completed tariff adjustment by the Public Utilities Regulatory Commission (PURC), Publication of the Auditor-General’s Report on COVID-19 spending, and Onboarding of Ghana Education Trust Fund (GETFund), District Assemblies Common Fund (DACF) and Road Fund on Ghana integrated financial management information system (GIFMIS).
The international and domestic bond markets are shut for the financing of government programmes, forcing the government to rely on Treasury Bills and concessional loans as the primary sources of financing for the 2023 fiscal year.
Therefore, consideration and approval of fiscal measures by Parliament are critical for recovery from the current economic crisis.