We can achieve 20 percent of revenue to GDP in 2 years -Ofori-Atta defends budget

Finance Minister-designate, Ken Ofori-Atta, has defended the 2021 budget presented to parliament.

In his first comments on the budget, he believes the proposal would propel Ghana into recovery with the new taxes and other programmes outlined to generate funds.

“If we have the numbers at the right places then really within two or so odd years we should be able to move revenue to the 20 percent of Gross Domestic Product (GDP) that we want because of digitization etc,” he said.

The 2021 Budget Statement and Economic Policy was read on Friday, March 12, by Caretaker-Finance Minister Osei Kyei-Mensa-Bonsu.

The Majority Leader had to take on the responsibility designated by President Akufo-Addo as Mr Ofori-Atta was seeking medical care for post-COVID complications in the United States.

The government is seeking parliamentary approval for GHȻ 111.3 billion as total expenditures while expecting total revenues and grants of GHȻ 72.1 billion for the year.

The expenditure for 2021 is also 13 per cent higher than the GHȻ 98.1 billion approved by parliament for 2020.

The budget was dominated by taxes and levies meant to shore up revenue for 2021 considering the adverse impact of the pandemic.

At least six taxes are on the table for parliamentary approval which includes:

  1. Energy Sector Recovery Levy of 20 pesewas per litre on petrol/diesel under
  2. Sanitation and Pollution Levy (SPL) of 10 pesewas
  3. COVID-19 levy of 1% on National Health Insurance Levy (NHIL)
  4. COVID-19 tax of 1% on VAT
  5. Financial sector clean-up levy of 5% on profit-before-tax of banks
  6. Road tolls review
  7. Gaming tax

What did Mr Ofori Atta say?

Mr Ofori-Atta who was Finance Minister in the first Akufo-Addo government, and expected to keep his position in the second tenure has no problem with the numerous taxes.

He said the country had issues with sanitation and the Delta Fund for energy, and these need to be tackled and so the petroleum taxes are supposed to solve that.

He was speaking during an online Post Budget Forum organised by PricewaterhouseCoopers on the 2021 Budget.

On the COVID-19 levies, Mr Ofori-Atta pointed out that it would ensure that the government is “able to pay for vaccines and get our people working so we don’t have lockdowns”.

It would help the government to complete its Agenda 111 “so that our infrastructure for health care would be robust”.

Agenda 111, under President Akufo-Addo, would see the construction of 100-bed district hospitals and some regional hospitals across the country.

He said it was time for banks to help especially after the financial sector clean-up.

The government said GHC 21billion was spent in executing the exercise.

After streamlining activities in the sector, the minister believes they should pay back since the “responsibility is not only for the government but for all Ghanaians”.

Mr Ofori-Atta wants Ghanaians to embrace a collective responsibility to revive the economy “as a shared burden philosophy” moving forward.

He said it was an incredible period of renewal where “we as Ghanaians must fight to get the economy back to where it was or where it should be”.

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