2015 Budget To Provide Tax Incentives

Terkper Pix 1The budget estimates for 2015 to be presented to Parliament tomorrow, will provide tax incentives in some key sectors of the economy.

The Ghanaian Times investigation yesterday, revealed that sectors such as the pharmaceutical industry, printing and agriculture would benefit from tax rebates to significantly increase production and create employment.

The Times has also gathered that the fiscal policy statement would focus on transformation of the national economy, moving it to the next stage of growth.

The budget is also expected to review the way the country grants tax exemptions to businesses, and this will enable the government to improve upon its revenue challenges, and address the numerous economic challenges confronting the country.

Meanwhile, economic experts and analysts have expressed diverse opinions and expectations about the impending budget.

Dr. John Gatsi, Senior Lecturer, University of Cape Coast Business School, told the Times that the 2015 budget should further deepen fiscal consolidation and set the tone for investment in areas to enhance comprehensive growth.

He said it was expected that an objective review of government policy implementation in 2014 would be done to outline areas of difficulties and the plan of action for 2015.

“It is further expected that a comprehensive policy and strategic implications of the International Monetary Fund (IMF) bailout discussion will feature,” he said.

Dr. Gatsi, however, stated that the budget should seek to provide a focused agenda and specific projects for the energy sector, realignment of debt management to reflect a sustainable trajectory, while showcasing a specific policy guide towards fighting corruption.

The budget, he said, should contain specific programmes to further manage macro-economic factors to quickly reflect on job-creation, while moderating aggressive fiscal measures by ensuring greater introduction of electronic mechanisms in revenue administration as a means of widening tax base.

A former Governor of the Bank of Ghana (BoG), Mr. Alex Ashia-gbor, said government should take bold measures to cut expenditure to control the ballooning budget deficit.

He said government could not continue to borrow to meet recurrent and capital expenditure, stressing that the “current economic challenges cannot be addressed if the state continues to borrow”.

Mr. Ashiagbor said the country’s resort to the IMF for a bailout was due to the fiscal indiscipline on the part of the managers of the economy and increasing expenditure.

“We need to start from a point. We cannot continue to talk about growing budget deficits arising from growing expenditure and yet accumulate more debts, ” he stressed, adding, “Nobody will like to borrow money to the country if it does not control its budget deficit.”

For his part, Mr. K. B. Asante, a former diplomat, said he envisaged the 2015 budget “to be harsh to correct the fiscal imbalances”.

According to him, next year’s budget “is not going to be easy” because of the country resorting to the IMF for an economic bailout.

Mr. Asante called on government to introduce strict measures and increase taxes, both direct and indirect, to raise more revenue to address the current economic challenges facing the economy.

While appealing to the entire citizenry and the private sector to sacrifice to pay more for taxes and utility services to enable government to raise enough revenue to tackle the budget deficit, he called on government to institute stringent measures to combat corruption.

The Elder Statesman   entreated the Minister of Finance and Economic Planning to ensure the early transfer of all statutory payments.

The Executive Director of the Institute of Fiscal Studies (IFS), Professor Newman K. Kusi, said the 2015 budget would be influenced by the IMF.

“Given the budget deficit, the IMF will focus on fiscal consolidation, put a cap on the country’s deficit and borrowing and wage bill, as well as a cut on energy subsidies,” he stated.

Professor Newman stressed that the budget should focus on “transforming the base of the economy and attracting foreign direct investments into the country”.

“Ghana is now a commodity powerhouse, with abundant natural resources such as oil and gold, and measures should be put in place to attract both local and foreign investments in these sectors,” he said.

He argued that the manufacturing and service sectors, held good prospects for the economy and incentives should be given to the private sector to invest there.

Prof. Newman also emphasised the need to strengthen public financial management systems, and advised on the Ministry of Finance to adopt measures to enhance proper formulation and implementation of the budget.

By David Adadevoh & Kingsley Asare   

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