Parliament approves stand alone VAT for GETFund and NHIL

Mrs Abena Osei Asare,Deputy Finance Minister Designate  (9)

Mrs Abena Osei Asare,Deputy Finance Minister Designate (9)

Parliament on Friday by consensus approved the Mid-Year Review of the Budget Statement and Economic Policy of the Government for the 2018 fiscal year.


The Finance Minister, last week presented the revised budget to the House in line with section 28 of the Public Financial Management Act.


Clause one of the section stipulates that “The minister shall, not later than the 31st of July each financial year, prepare and submit to Parliament a mid-year fiscal policy review.”


The House, since Monday has been debating the revised budget which among other things introduced a tax on luxury vehicles with 3.0 engine size and increased personal income tax on persons who earn more than GH¢10,000 as their basic salary.


It also restructured the Value Added Tax decoupling the components of the Ghana Education Trust Fund and the National Health Insurance Levy making them stand-alone taxes.


The Minority Leader, HarunaIddrisu, rounding up the position of his side of the House noted that some portions of the PFMA have been breached, insisting that the budget would expose the citizenry to more hardship.


According to HarunaIddrisu, the weak performance of the cedi against the US dollar and other major currencies amidst low domestic revenue mobilization among other indicators was evident that the government was losing its grips on the economy.


In his view, there was an upward adjustment of the Value Added Tax and that he said was reflected in an enhancement of VAT from a purchase input tax to a sales tax which would lead to an increment in the prices of goods and services.


He said at the time the National Health Insurance Programme and the Ghana Education Trust Fund were in financial distress, it was only fair that whatever accrues from the adjusted VAT were dedicated to the funds and not used for other budget support purposes.


He accused the government of falling on the GETFund and the Health Trust Fund to support their flagship campaign programmes which he said were rendering the programmes under the funds stagnant.


But a Deputy Finance Minister, AbenaOseiAsare in a response on behalf of the Majority caucus said the minority was not being truthful to the facts.


The Atiwa East lawmaker said since assuming office in January 2017, “the economy has really improved from what we inherited.”


She said by the prudent management mechanisms adopted by the government, more children were being fed under the school feeding programme, more having access to secondary education, which has brought comfort to many parents with nurses and teacher trainees enjoying their allowances.


Mrs. Asare said the government reduced fiscal deficit from 9.3 of Gross Domestic Product (GDP) in 2016 to 5.9, reduced inflation from 15 per cent in 2016 to 11 per cent now and public debt reduced from 73 per cent in 2016 of GDP to 69 per cent.


In growth, she said the economy expanded from 3.7 per cent of GDP at the end of 2016 to 8.5 in 2017 and is expected to grow at six per cent this year.


“These are indisputable facts about our economy today and I know it provides no comfort to the Honourable Members on the other side,” she said and extended a hand of partnership to the Minority for the betterment of the generality of Ghanaians.


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