The Minister of Finance Ken Ofori Attah is in Parliament to present a mid-year review of the 2018 budget.

For just one reason-taxes and how to meet revenue target- the mid-year review presentation has become a subject of great expectation, anxiety laced with the usual partisan political debates.

Minority claims of a VAT increase to be announced by the Minister have been deflated but the talk on the taxes is still high on the agenda.

As minority and majority MPs welcome the Minister to the floor of Parliament, with the usual chants of Yeee ye!!! Nooo No!!! and a possible placards exhibition, Myjoyonline.com will give updates of the figures, drama, the news and the analysis as presented by the Minister and the political economists.

The Finance Minister Ken Ofori Atta, in his usual white, appears on the floor with a bow; he is led by the head of the economic management team, and Vice President Dr Mahama Bawumia who is in a dark attire. 

After a number of loan agreements were laid on the floor and forwarded to the Finance Committee of Parliament, the Finance Minister steps up to present the budget.

Presentation

Yesterday was Mandela’s birthday we must recognize one of his statements a country is built with action, not words. Let our actions speak and not words.

It is also fitting to remember JH Mensah. We have not seen a more exemplary finance Minister in the life of this country. Let also remember our former Vice President, with decorum remember or former Vice President Papa Kwesi Amissah Arthur. May his soul also rest in peace.

We have to speak with one language if we are to execute our policies successfully.

IMF Connection

In April 2015 the NDC government sought and received approval IMF to help redeem the economy. After one and a half year of the implementation of the IMF programme, this was what the IMF said;

The economic outlook was difficult. Growth outlook has weakened. Authorities must cut expenditure to meet revenue shortfalls.

The NPP inherited a distressed economy, but after one year of implementation of the same IMF programme, fiscal deficit declined.

Pleased to report in less than one-year collective effort of the country has yielded fruits.

The same IMF reported that the new government has;

Reduced Fiscal deficit from 9.2% in 2016 to 5.9%

Inflation reduced 16% in 2016 to 11.8% in 2018.

The government managed to pay 6 billion cedis of outstanding claims inherited. The regime has also invested in the future of the people and provided over 90,000 people access to education and improved future prospects of children.

We have supported over 200,000 farmers with fertilizers, given tax reliefs of 800m cedis to businesses through the withdrawal of nuisance taxes.

Pension funds of over 3m cedis have been transferred something the previous regime had been unable to do in seven years.

Stabilized the economy, invested in the people.

Cedi

Cedi has come under pressure due to external pressures. Average performance of the dollars the best in recent years.

In 18 months the cedis has performed better than seven years of the previous administration.

Taxes

Last year we abolished numerous taxes. The economy has responded positively. We are not collecting as much as we should. The solution is not to impose many taxes. The wealthy must pay a fair share of taxes. Taxes should elicit socially desirable outcomes. There will be no increase in VAT as has been speculated.

We should stop taking directions on economic policies from social media. So the measures to meet fiscal deficit target to ensure that we exit IMF programe are as follows

We are converting the NHIS 2.5% to a straight levy of 2.5%; Converting GETFUND of 2.5% to the straight levy of 2.5%. VAT will thus be maintained at 12.5%. We are imposing a luxury vehicle tax. We are reviewing personal income tax of 10,000 cedis, intensifying compliance measures. 

Updates on key policy and flagship projects and programmes

The vision is to accelerate growth and development in the country and not leave anyone behind

Planting for food and job program – 700m was allocated to the programme out of which 366m has been released to fund aspects of the programme. The programme received a boost in motorcycles distributed.

Infrastructure for poverty alleviation begins with the governing boards constituted.

IDIF

To date, the Ministry has received 781 expressions of interest, 632 of which have been reviewed with 332 identified for support. Cabinet has approved tax incentives. We have negotiated with a number of banks to provide funding. Government will subsidize loans to these factories. 

Government will continue with the implementation of Free Education. 362,000 are benefitting since its implementation in 2017. 899 million has been released to fund the project. 96,000 desks beds, student mattresses have been provided.

Infrastructure financing

The government has decided on a new policy to finance Ghana’s infrastructure which is in deficit.

The policy is to leverage natural resources to finance infrastructure. In line with that Chinese Sino-Hydro has been engaged a barter system with an amount of 2bn dollars of infrastructure in exchange of refined bauxite. This 2bn of infrastructure will not add to debt stock; no resources will be encumbered. Ghana will fulfill barter arrangement over 12 years.

The first phase will focus on roads subject to Parliamentary approval. The first tranche will finance and complete all key roads in the ten regions.