The Majority and Minority caucuses are sharply divided over the efficacy of the Mid-Year Review of the Budget Statement and Economic Policy for the 2018 fiscal year to deal with the economic challenges of the country.
In the view of the minority, the reviewed budget was deceptive and would exacerbate the economic hardship the citizenry was faced with but their counterparts in the majority believe the document was the antidote to the difficulties identified in the economy.
Finance Minister, Ken Ofori-Atta, was in Parliament to deliver the mid-year budget review pursuant to the Public Financial Management Act 2016, Act 921.
“The Minister shall, not later than the 31st of July each financial year, prepare and submit to Parliament a mid-year fiscal policy review” Act 921 states.
Contrary to speculations that the Value Added Tax was set to increase from 17.5 per cent to 21 per cent, the tax percentage was maintained though other taxes like Personal Income Tax was increased whiles a luxury vehicle tax was introduced.
Delivering the reviewed budget before a near-full Parliamentary chamber, Mr Ofori-Atta said the economy was on track.
He mentioned the declines in budget deficit, inflation, the introduction of the free Senior High School policy, and the restoration of nursing and teacher trainee allowances, stable power amongst others as indications the economy was doing well.
“Mr Speaker, government is making significant strides in establishing a strong and prudent macroeconomic and development agenda on a solid foundation. We are confident we are now well established on a sustainable growth path.
“The initiatives we have undertaken are bringing greater clarity of our priorities with emphasis on spending on growth enhancing opportunities such as road and railway development and the Infrastructural for Poverty Eradication Programme IPEP”, Mr Ofori-Atta told Parliament.
But reacting to the review, Bolgatanga Central MP, Isaac Adongo said VAT has automatically been increased by five per cent by “converting what is a tax credit to a final tax.
According to Mr Adongo, the new tax measures would heap the suffering of the masses, a position which was supported by a former Deputy Finance Minister, Fifi Kwetey.
Citing the government for hypocrisy, Mr Kwetey expressed shock at the “borrowing spree” the government was on and said the rate at which the US dollar was depreciating sends a signal that the government has lost control of the economy.
A Deputy Information Minister, Kojo Oppong Nkrumah, however disagrees with the post-mortem of the economy by Fifi Kwetey.
The Ofoase-Ayirebi MP said the volatility the US Dollar has experienced in recent times was occasioned by international circumstances and could not be attributed to poor management.
He said the government was a human-centred one and that was why it did not increase the VAT and that the luxury car tax was strategically couched to source from the affluent in society to support the economy.
The Member of Parliament for Bantama, Daniel Okyem Aboagye, on his part said the Minority was dazed by the economic prowess exhibited by the economic management team of the government.
He justified the decision to increase personal income loan saying “that is what pertains in other parts of the world. Do you know what luxury cars do to the economy? They consume a lot hence the need for government to import fuel hence putting pressure on the cedi.”
Samson Awingobit Asaki, the Executive Secretary of the Importers and Exporters Association of Ghana said the luxury car tax would increase the cost of the importation of vehicles and said the extra cost would be transferred onto the consumer.
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