Ken Ofori-Atta to announce massive tax increments in Mid-Year Budget Review

25th July 2022

The Herald is picking up reports that the Finance Minister will this afternoon slap Ghanaians with tax increments across board.

Ken Ofori-Atta, is expected in Parliament today, Monday 25th, 2022 for a Mid-Year Review of the Budget Statement and Economic Policy of the Government for the 2022 financial year, and The Herald has information that there’s going to be a massive increment in taxes.

The Value-added tax (VAT), which is charged on supply of goods and services made in Ghana as well as imported goods in particular, is mentioned as going up.

The current standard VAT rate is 12.5%, except for supplies of a wholesaler or retailer of goods, which are taxed at a total flat rate of 3%, and these are said to be going up.
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Many have called for the resignation of Ken Ofori-Atta over his poor performance and the mismanagement of Ghana’s economy which had seen inflation skyrocketing to almost 30%.

Meanwhile, Accra-based Citi FM reports that the Finance Minister in Parliament today, will among other things, “expected to provide information on how revenue and expenditure had performed in the first half of the year and the country’s current budget deficit figures”.

It said that with the government officially reaching out to the International Monetary Fund (IMF) for support, the minister is also expected to make his first official comments on this decision, after publicly stating that the country would not go to the IMF.

“Ahead of that, some stakeholders have been sharing their expectations, including calling for the reduction in the current charge rate of the Electronic Transfer Levy (E-levy) and a review of the tax exemption regime to curtail revenue losses.

“Indications are that the government’s latest revenue generation strategy, the electronic transfer levy, is woefully failing to meet government targets.

Though the government has not officially indicated how much the levy has accrued after two months, suggestions are that the government is raking in only 10 percent of the estimated revenue.

The government is believed to have been targeting revenue of GH¢600 million from the 1.5 percent levy on electronic financial transactions.

The government’s revenue target for 2022 from the levy is GH¢4.5 billion.

Deputy Majority Leader, Alexander Afenyo-Markin, announced pursuant to Article 179 (8) of the Constitution and Standing Order 143, Mr. Ofori-Atta, is expected to lay before the House a supplementary estimate for consideration as part of the mid-year review.

He made this known last Friday during the presentation of the Business Statement for the 10th Week ending Thursday, July 28, 2022 on the floor of Parliament.

As indicated the Majority Leader, Osei-Kyei Mensa Bonsu, last week, the Finance Minister, also is expected in the House, later today to attempt eating back his words on the same subject that the country’s gross international reserves had been depleted from US$9 billion in December 2021 to US$3 billion ending June.

Ghana, is broke and said to be almost close to the state of bankruptcy suffered by Sri Lanka where fuel, medicines and other essential commodities could not be purchased by Gotabaya Rajapaksa government leading to mass protests, civil unrest and the toppling of that government.

For fear of the country being blacklisted by creditors, the Chairman of Parliament’s Finance Committee, rushed to the floor of the August House, seeking to alter Finance Minister, Ken Ofori-Atta’s alarming words that the country’s gross international reserves had been depleted from US$9 billion to US$3 billion.

Kwaku Agyemang Kwarteng, had through the Committee, laid the report before the House copiously quoting the Yale University-trained Finance Minister, that the country was days away from bankruptcy, therefore, urgently needed a US$750 million loan facility from AfreximBank to support the economy, but has since been seeking to expunge the frightening words afraid of a negative reaction from investors and others.

But the Minority, insists that the statement was an attempt to conceal the true nature of the country’s perilous economic situation with the Ranking Member on the Committee, Dr Cassiel Ato-Forson, took issues with the demand saying the statement cannot be used to amend reports of Committees.

“I not aware that a statement can amend a Committee’s report after the Committee report had been adopted and subsequently approved. Mr. Speaker, the 3 billion that Committee reported did not just surface. These are statement that came from the Minister responsible for Finance. Mr. Speaker, I was in that meeting”.

Referring to Mr Kwarteng, Dr Ato-Forson, insisted that he does not think that he is clothed with the powers to amend the statement, adding if the information available to the Parliament is different from what the Central Bank has, it is up to the Central Bank to issue a statement and clarify the matter.

“The Bank of Ghana, should issue a statement to correct same”, Dr Ato-Forson stressed.

The Minority Chief Whip, Alhaji Muntaka Mubarak, added his voice to the matter arguing that the information that the international reserves had been depleted from US$9 billion to US$3 billion was provided by the Finance Minister himself and none other.

To him, the latest twist means that the Finance Minister lied to the Committee to convince them to approve the US$750 million loan agreement from AfreximBank.

Referring to Mr Kwarteng, the Minority Whip said if what he sought to do was anything to go by, he had done more harm than good as his claims meant that Mr Ofori-Atta, lied to the Committee to get the loan.

“If what he is saying is true, it means the Minister of Finance lied to the Committee, and Mr. Speaker, I am saying that all these legs, he makes the situation worse”, the Minority Chief Whip said.

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