Presenting the Mid-Year Review of the Budget Statement and Economic Policy of the Government for the 2018 Financial Year on the floor of Parliament, the Minister for Finanace, Ken Ofori-Atta, has indicated that there will be no increase in Value Added Tax (VAT) as it has been speculated in the media.
Addressing the cedi’s depreciation, Mr Ofori-Atta informed the house that the Cedi has come under pressure due to external forces and average performance of the dollar is the best in recent years.
He pointed out that the economic outlook for 2016 and the beginning of 2017 was difficult weakening growth outlook.
He stated that such economic challenges led to the government and other authorities cutting down on expenditure in order to meet revenue shortfalls.
Mr Ofori-Atta revealed that the current government inherited a distressed economy but after one year of implementation of a proposed International Monetary Fund (IMF) programme, the fiscal deficit declined, indicating positive results in the economy.
In explaining further, Mr Ofori-Atta indicated that an IMF report showed that the Fiscal deficit had reduced from 9.2 percent to 5.9 percent and Inflation from 16 percent to 11.8 percent.
“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”. He disclosed.
On tax reforms and strategic approaches in the economy, Mr Ofori-Atta, reiterated that “we are converting the National Health Insurance Scheme (NHIS) 2.5 percent to a straight levy of 2.5 percent, converting Ghana Educational Trust Fund (GETFUND) of 2.5 percent to straight levy of 2.5 percent.
VAT will thus be maintained at 12.5 percent. We are imposing a luxury vehicle tax. We are reviewing personal income tax of 10,000 cedis, intensifying compliance measures”. He added.