2023 budget gets parliamentary nod
The Parliament of Ghana has approved the 2023 Budget Statement and Economic Policy in spite of resistance from opposition lawmakers over the inclusion of a debt exchange programme and increased value-added tax.
Finance Minister Ken Ofori-Atta last month proposed a budget that aimed to narrow Ghana’s enormous deficit with spending cuts and new revenue-generating measures. It also included a domestic debt restructuring programme.
The House has been debating the statement since November 29, after it was presented by the Finance Minister.
The minority group had raised concerns during the final debate about some of the revenue generation measures, including the removal of a threshold on the Electronic Transaction Levy and a 2.5% increase in VAT.
The approval paves the way for estimates for ministries, departments, and agencies, (MDAs) to be referred to the various committees for scrutiny.
The approval paves the way for estimates for ministries, departments, and agencies, (MDAs) to be referred to the various committees for scrutiny.
Minority Leader, Haruna Iddrisu reiterated his call for the government to drop its decision to increase the VAT rate by 2.5 percent and scrap the E-levy threshold warning such a move will not get the support of the minority caucus.
“Without going further we in the NDC minority group will fiercely resist and fight the imposition of this additional tax on Ghanaians and Ghanaian businesses because Mr. Speaker it will only exacerbate and increase the hardship they’re already going through, will increase the cost of doing business for many Ghanaians, and it will make it difficult for ordinary Ghanaians to cope,” Mr Iddrisu said.
But the majority leader Osei Kyei-Mensah-Bonsu said the 2.5% increase in VAT will go into the construction of roads.
“About 25% of questions that are asked in this Chamber relate to Roads. Some roads have begun and the intention is to ensure that they don’t deteriorate, they’re not left unattended to, so the 2.5% increase in VAT we have been told primarily is going to be used for road construction. If you don’t want your roads to be constructed, tell us that you don’t want your roads to be constructed,” he said.
Ghana’s debt amounts to more than 100% of its gross domestic product, and payments to service that debt regularly range between 70% and 100% of government revenue.
The country is in talks with the International Monetary Fund for a support package to help relieve its debt distress, and hopes to secure a staff-level agreement in coming weeks.
