The Ministry of Finance, following the recent domestic debt restructuring and ongoing negotiations with international creditors, has implemented strategies to stabilise the economy.
Deputy Minister of Finance, Dr Alex Ampabeng discussed some measures to provide a clear roadmap out of the crisis.
“What we are doing with GRA, and actually I am leading that with the Ghana Revenue Authority, is to reform a taxpayer database. We want to clean it to the point where the less active ones, we are able to track individuals and their businesses with the help of Ghana card, with the help of digitization, with the help of the digital address systems, you’re able to mark up people’s businesses and incomes and therefore becomes easier with compliance. We are also looking at reviewing all the tax handles, all the tax policies.”
“We are reviewing all the tax handles to make sure they are less punitive, will create an environment that is business friendly from the tax front, and that FDI inflows will increase and Ghana will gain this position as we used to be. A number of taxes will be assessed. You’re going to look at which one of them has to be removed, which one has to be modified and which one has to be reintroduced.”
Dr Ampabeng also proposed a debt ceiling to limit the maximum amount of debt the government can incur.
“We want to have a debt ceiling. So as part of fiscal rules, the Minister even intended in the Mid-year budget to restore the 5% fiscal rule. Now we also want to have a very strong fiscal Council. And it’s something the minister has already worked on and I think is going to cabinet very soon that we want an independent fiscal council, the council that will be able to advise but crucially, be able to shoulder the workload because if you are having just about four or five people as we have now as an advisory council, their role will be different than when you have an independent fiscal council like we have the Congressional Budget Office.
“It is going to have a team of competent individuals who are able to stand pressures and the key we are putting is independence.”
Meanwhile, President of the Hoteliers Association of Ghana, Edward Ackah-Nyamike Jnr welcomed the measures but urged the government to ensure its effective implementation.
“It is quite worrying that the government is responding to the issues and challenges raised for a very long period. To also say we do hope that this is not just something to pull industries down only for the status quo to continue.”
“We are hoping that whatever we are planning to do with regard to realigning the tax regime, which we have complained. We are calling for consultation of taxes for the industry,” he said.
Even though the measures have received applause from some quarters, the Economist and Professor of Finance at the University of Ghana Business School, Prof Godfred Bokpin, wants the Government to be intentional about having a lean administration.
“Whilst the government is making a lot of plans about increasing our revenue to GDP ratio and we applaud that, very little is being done and demanded from citizens about expenditure efficiency. The overhaul of procurement is where the issue is. If you examine the data carefully, you will realise that even though historically, our tax revenue to GDP ratio has been low, it has not constrained the government from spending the way they have to spend.”
“The next government should adopt a lean government approach. It should not have more than 40 ministers. It should be less than that. We should merge some ministries, and collapse some agencies. Some development authorities we have established in the last eight years or so have not been enhancing our productivity. They are just a drain on the national affairs. So let’s progressively shrink governance cost.”
Source: Myjoyonline