The Minority in Parliament is warning the government against increasing taxes in the upcoming mid-year budget review which will be presented by the Finance Minister Thursday.
They say government must rescind its decision because any such increases will put too much burden on Ghanaians who are already struggling to get by.
Speaking at a press conference dubbed ‘the mid-year economic performance and projections; the Minority’s perspective’, Minority Spokesperson on Finance, Cassiel Ato Forson said government will only be punishing the poor with the increases.
“The Akuffo-Addo government should be wary of burdening Ghanaians in its desperation to save face. The fiscal problem is a direct result of shallow opportunism and populism,” the former deputy finance minister said.
The 2018 budget statement is themed “from stabilisation to growth: putting Ghana back to work again” and anchored on the medium term development programme aimed at providing opportunities for growth and job creation.
The government’s maiden budget in March 2017 highlighted a number of bold policy initiatives designed to restore macroeconomic stability, tackle structural rigidities in the budget, boost productivity through abolishing “nuisance taxes” while plugging revenue leakages and reducing import exemptions, tightening expenditure controls to minimise inefficiencies, and reducing the incidence of poverty through job creation.
Before this year’s mid-year budget review, however, speculations are rife, that the government intends to increase Value Added Tax, (VAT), from 17.5% to 21%. The Finance Minister, Ken Ofori Attah has remained tight-lipped on whether or not this is true, only saying that “until I come to Parliament, we won’t know.”
The Minority believes the electoral promises made by the NPP during the 2016 elections were intended only to get them elected and convey an impression of fidelity.
“The reality, however, is that it has led to a major problem for the economy which has translated into severe hardship for the generality of our people,” Mr Forson who is also Member of Parliament for Ajumako Enyan Essiam constituency said.
He added “Inflation has begun rising again and is now in double-digit following a fleeting stay at single digit in the last two months or so.
“The Ghana cedi continues its catastrophic nose dive and is showing no signs of improvement despite a lofty talk from the government and the central bank,” he noted.
Currently trading at GHS 4.85 to the dollar, Mr Forson fears the cedi’s decline if not addressed could reach GHS5.00 to the dollar by the end of the year.
“This will, in turn, lead to a steep rise in the prices of goods and services leading to more hardships for the people,” he added.
He also took the government on over what the Minority believe is its excessive borrowing.
Comparing the amount of money borrowed so far by the Akufo-Addo-led administration in under two years to the NDC’s eight years, Mr Forson described the situation as alarming.
“They have borrowed nearly half of what the NDC borrowed in eight years. More worrying is that they have virtually no serious capital investment to show for this level of borrowing except a reckless dissipation of borrowed funds on consumption that saddle present and future generations with debt they will struggle to pay in the future,” he claimed.
Data below shows Ghana’s debt to GDP ratio as calculated by Trading Economics