TEMA AGI EDUCATE MEMBERS ON MIDYEAR BUDGET REVIEW
The Tema Branch of the Association of Ghana Industries (AGI) has organized a seminar to educate members on the 2018 midyear budget review presented to Parliament by the Hon. Minister of Finance, Mr. Ken Ofori Atta.
The seminar, which was held in Tema on Wednesday, 23rd August 2018, had dozens of business owners and industrialists participating. The main resource person was Dr. Alhassan Iddrisu, Director of Economic Research and Forecasting at the Finance Ministry who led the presentation.
In his opening remarks, Rev. Dr. George Dawson-Ahmoah, Chairman of Tema AGI underscored the need for such a seminar considering the fact that the new policies and tax measures in the reviewed budget will ultimately impact on businesses and industry. He observed that the seminar is a series of quarterly engagements the Association continues to have with its members in the Tema area on various topical issues.
Dr. Alhassan took participants through various topics such as the government’s fiscal and expenditure targets for 2018, inflation targets, tax policy and tax compliance measures introduced in the reviewed budget.
According to him, Government has had to revise the fiscal measures for 2018 “because of the lower than anticipated revenue mobilization for first half of year, the $2bn Eurobond issued by the government as well as the additional programme loan of $911.5m received from the IMF upon a successful completion of the fifth and seventh fund review”. Other reasons for the review of the budget, according to him, include the government’s issuance of a $2.2bn loan to support GCB’s purchase and assumption of UT and Capital Banks.
Dr. Alhassan disclosed that the Government has revised its Revenue and Grants from GHc51bn to GHc50.6bn, and Expenditure from GHc62bn to 61.7bn. He disclosed that, notwithstanding these revisions, Government still expects to hit a deficit of 4.5% at the end of 2018.
Three main new tax policy measures were introduced in the 2018 budget review, according to the resource person. These measures include a luxury vehicle tax of GHc1000 to GHc2000 to be levied annually on vehicles with engine capacity above 3.0 litres, a review of personal income tax to include an additional income band of GHc10, 000 and above per month at a rate of 35%, and the restructuring of the Value Added Tax to a 12% VAT and conversion of the National Health and the GETFund VAT from 2.5% levy respectively into straight taxes.
Participants took turns to ask questions concerning the reviewed budget. Some key concerns raised included the proposed VAT restructuring, challenges with the classification of some industry vehicles as luxury vehicles, and the new personal income tax band.
On the new VAT measures, participants raised issues with the conversion of the NHL and GETFund levies to straight taxes of 2.5& respectively. They contend that the conversion ultimately meant that prices of their goods and services will see an upward adjustment, as they have to pass on the new costs to the final consumer. The forum was also unhappy with several instances of wasteful and expensive procurements by the government. They, therefore, called on the government to be mindful of its expenditures and pay attention to the prudent management of revenue.