Finance Minister Ken Ofori Atta is likely to present the Mid-Year Review on July 19. Sources say this is the date the minister is considering subject the parliament’s approval.
Checks with some of the leadership of parliament have also confirmed the date but say it should be seen as provisional.
Why this review?
The country’s Financial Management Administration Act requires the finance minister to come before Parliament not later than July 31, prepare and submit to parliament a Mid-Year Fiscal Policy review.
This should include the finance minister is expected to review the estimates outlined in the Budget that the finance minister presented in that financial year.
This often allows the finance minister the opportunity to review the targets, especially when it comes to the review,
a. A brief overview of recent Macroeconomic Developments of Governments
b. Update of Macroeconomic forecast undertaken by the government
c. Analysis of total revenue and expenditure and performance for the first 6 months of this year
d. Also where necessary, revise the Medium Term Budget outlook the budget outlook and Expenditure framework.
Dealing with Revenue Challenge
Some have said that this Mid-Year Review would basically be heavy on tax measures and what policy measures should be implemented to help deal with the challenge.
The Finance Minister has already maintained that he plans to review these revenue measures to help deal with some marginal shortfalls in revenue.
Provisional Data from the Bank of Ghana puts revenue mobilized May ending at GH¢9.4 billion, down by almost 4 per cent against government’s own target.
Proposed tax measures
Sources say the Mid-Year Review could result in some taxes going up. JOYBUSINESS is learning that the VAT could reach 20 per cent, while SSNIT contributions are expected to go up.
This would result in VAT going up by 2.5 percentage points from 15 per cent to 17. 5 per cent, while the National Health Insurance Levy would also go up by 2.5 per cent, totalling 20 per cent.
Increase the SSNIT Contribution to NHIS by 2.5 percentage points with 1 percentage points for employers and 1.5 percentage points for employees.
Sources say these two measures should bring in or yield about GH¢2.4 billion to revenue for the government. JOYBUSINESS is learning that these measures together with improving collections and broadening the tax base would help deal with revenue challenges.
The government will complement the proposed increase in the tax rates with measures to broaden the tax base.
These measures include the implementation of the Nation Builders Corps to reach out to more taxpayers to enhance revenue generation as well as compliance measures.
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