The increase in taxes as well as introduction of new taxes in the 2021 budget will be competing with other government interventions to determine its effect on the rate of inflation.
According to the Government Statistician, Professor Samuel Kobina Annim, although the new taxes cannot be over ruled in the next measurement of inflation, it is unable to determine the exact effect due to some other government interventions that may have impact on the general price level.
“The challenge is our ability or inability to predict the extent and the dimension. What we should always bear in mind is that the implication of tax will not be operating in a vacuum it will have to compete with other government interventions. So, how will it impact on the general prices of goods and services that will be determined by the net effect that will come from other policies that are put in place concurrently with the taxes imposed?”
“So yes, one will expect it but it will be difficult to see the dimension at which it [taxes] will impact on inflation”, he said.
The national year-on-year inflation rate was 10.3% in March 2021, which is same as the 10.3% recorded in February 2021.
Month-on-month inflation between February and March 2021 was 0.9% (slightly higher than last month).
Housing, Water, Electricity, Gas’ (29.0%, up from 23.4% last month) and ‘Food and Non-Alcoholic Beverages’ (10.8%, down from 12.3% last month) recorded the highest rates of inflation.
March inflation rate showed the relative stability in inflation between February and March 2021.
The Greater Accra region continues to record the highest rate of inflation, registering a 17% inflation rate in March 2021.
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