"Jaw-dropping tax incentives and reliefs announced by the Finance Minister, Ken Ofori-Atta, in the 2017 ‘Asempa’ budget statement yesterday which clearly defined policies to resuscitate the ailing economy and restore hope for Ghanaians, completely dazed the minority National Democratic Congress (NDC) Members of Parliament (MPs)."
Jaw-dropping tax incentives and reliefs announced by the Finance Minister, Ken Ofori-Atta, in the 2017 ‘Asempa’ budget statement yesterday which clearly defined policies to resuscitate the ailing economy and restore hope for Ghanaians, completely dazed the minority National Democratic Congress (NDC) Members of Parliament (MPs).
The finance minister announced as promised by the New Patriotic Party (NPP) during the electioneering campaign, that the Akufo-Addo government has abolished the 17.5% VAT/National Health Insurance Levy (NHIL) on financial services, 5% VAT on Real Estate sales, abolished excise duty on petroleum, 1% Special Import Levy, 17.5% VAT on selected imported medicines that are not produced locally, duties on spare parts, 17.5% VAT/NHIL on domestic airline tickets, levies imposed on religious institutions by local authorities and also levies imposed on head porters popularly known as kayayeis. The government has budgeted GH¢58.1 billion for the fiscal year.
The announcement was received with wild jubilation by spare parts dealers at Abossey Okai and other traders as well as kayayei in Kumasi who were all excited by the pro-poor policies of the NPP administration.
However, a former deputy finance minister, Casiel Ato Forson, has cautioned Ghanaians to brace up for difficult times because of challenges he envisages government’s decision to scrap some of the taxes might pose for the economy.
Mr Ato Forson said the governing NPP’s decision will worsen the predicament of Ghanaians rather than mitigate them.
But the majority NPP members greeted the announcement by Mr Ofori-Atta with euphoria as some members of the minority were seen applauding the gesture by the government.
Vice President Dr Mahamudu Bawumia and the Senior Minister, Yaw Osafo-Maafo, who were in parliament and seated right behind the finance minister offering the necessary moral support, were also seen grinning as the minister ran through the fiscal statement.
The minister also announced that the government has also reduced special petroleum tax from 17.5% to 15%; reduced National Electrification Scheme Levy from 5% to 3% and also reduced Public Lighting Levy from 5% to 2%.
He said the tax incentives were being offered to lift the burden on the private sector, the general public and let the private sector also grow and create more jobs for Ghanaians.
The minority members defied the speaker’s order not to display any ‘offensive’ placards as they showed placards with the inscription, “419 Budget,” after realising that the majority members had a lot to cheer about – with the numerous new policies and social interventions introduced in the budget to bring the needed relief to Ghanaians.
He said GH¢400 million has been budgeted for the take-off of the free secondary school education as promised by President Nana Akufo-Addo.
Mr Ofori-Atta said the teacher trainee and the nursing training allowances have been fully restored by the government and so the trainees will again be receiving them.
He told parliament that the government has also sunk seed money of GH¢219.5 million into the Zongo Development Fund which will support the provision of critical infrastructure in education, training, health and sanitation, local businesses and centres of culture as well as improve security in the Zongo communities across the country.
He also said government under the Infrastructure for Poverty Eradication Programme (IPEP), will give $1 million annually to each of the 275 constituencies as direct capital expenditure towards local and constituency-level development.
“To ensure that the IPEP and other local initiatives are implemented in a well-coordinated manner, the government will set up the Northern Development Authority, the Middle Belt Development Authority and the Coastal Development Authority,” Mr Ofori-Atta pointed out.
According to the finance minister, the National Identification Scheme is a priority project of the NPP government which it intends to re-launch this year.
“Government has commenced stakeholder consultations to revive and roll out the National Identification Scheme in 2017. All registered persons will be provided with a unique identification number and an ID card free of charge, which will be required to facilitate the efficient delivery of public and private services, including financial services, mobile banking, m-commerce, social safety nets, health insurance and revenue collection, among others,” the minister disclosed.
He said the government will also initiate the National Entrepreneurship and Innovation Plan (NEIP) to provide integrated support for early-stage (start-up and small) businesses, focusing on the provision of business development services, business incubators and funding for youth-owned businesses.
According to the minister, the National Industrial Revitalisation Programme (NIRP) will also be established to provide technical and financial support to existing companies that are deemed viable but are currently distressed or facing operational challenges in addition to the government’s flagship programme of ‘one district, one factory’ that would be implemented by the Ministry of Trade and Industry to create jobs for the Ghanaian people.
He said under the ‘one village, one dam’ policy, small to medium scale irrigation schemes would be rehabilitated.
According to him, the government’s policy of ‘Planting for Food and Jobs’ will help create 750,000 jobs which will involve the production of maize, rice, soya bean, sorghum and vegetables.
The finance minister said to make basic education truly free, the government will increase the capitation grant from GH¢4.50 per child to GH¢9.00 and also introduce equity in government support to schools by restructuring disbursement of capitation to introduce equal amounts of base grant to be paid to all schools at the beginning of the academic year, disburse 50 percent of total capitation as base grant and the remaining 50 percent on capita basis.
Mr Ofori-Atta said the government will procure and distribute 250,000 pieces of school uniforms and 40,000 pieces of school sandals to pupils in selected deprived communities under the Social Intervention Programme (SIP).
He said for the government to be able to accomplish all the policies outlined, it has budgeted a total of GH¢58.1 billion for expenses in 2017 pending the mid-year review of the budget, while it is expecting a total revenue of GH¢44.9 billion.
He asserted that the government has targeted a Gross Domestic Product (GDP) growth of 6.3% from 3.6% inherited from the NDC; reduce inflation from 15.4% to 11.2%; reduce fiscal deficit from 8.4% to 6.5% and grow gross foreign assets to cover at least three months of imports of goods and services.
The minister told parliament that out of the budgeted amount of GH¢58.1 billion, GH¢3.7 billion will be used to pay arrears left by the previous government and GH¢13.9 billion for interest payment.
The budget christened ‘Asempa Budget,’ was themed, “Sowing the Seed for Growth and Jobs.”
The MP for Nsawam/Adoagyiri, Frank Annoh-Dompreh, told DAILY GUIDE that he was very much satisfied with the budget.
“This is an unprecedented business friendly and human friendly budget with an audacious tax regime which will reduce the burden on Ghanaians and encourage the private sector to grow,” he noted, adding that the minority will not have anything bad to say about this budget unless they want to be mischevious.”
He said the government must focus on its set targets in the budget and bring the needed relief to suffering Ghanaians.
MP for Wenchi and Minister of Planning, Prof George Gyan-Baffour, said this year’s budget is a fiscal statement that will bring hope to Ghanaians.
He said the budget is to open up the fiscal space to let the economy grow, adding that the tax reliefs will let businesses expand and provide more jobs for Ghanaians.
The MP for North Tongu, Samuel Okudzeto Ablakwa, noted that the government used “sugar-coated words” in the budget to deceive Ghanaians.
He said nothing was said about the 200 community senior high schools initiated by the previous NDC government but the NPP government is promising free education at the secondary level which will definitely increase enrollment and the need for expansion in secondary school infrastructure.Share your views
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