Two Ghanaian consultants in the business sector have expressed their reservations about the 2023 Budget Statement read by the Minister of Finance, Mr. Ken Ofori-Atta, on Thursday.
According to them, the increment in the Valued Added Tax (VAT) by 2.5 percent will increase the cost of doing business and further burden consumers who are already struggling to survive.
A Chartered Tax Consultant, Mr Maxwell Atila, has described the budget as “not a good one” because it was not fair to Ghanaians.
He explained that already due to the current difficult economic situation the country was facing, people’s working capital and disposable incomes, as well as the capital of companies had been affected.
He questioned the rationale behind the increase in the VAT when prices of goods and services were on the rise.
According to Mr Atila, the impact of the increase in the VAT would be felt by households, as they are the final consumers of products and services.
“We are all struggling with an inflation of over 40 per cent, yet the government still goes ahead and increase the VAT, which will finally come to the households because they are the ones in charge of consumption,” the tax consultant said.
He said with the current economic situation, companies were not increasing salaries of staff but prices of goods were increasing on daily basis, which is a disadvantage to the citizenry.
“This should rather be the time the government will think of how they will cushion us; people are losing monies, business capitals are shrinking because of the inflation,” Mr Atila said.
With regard to the electronic transaction levy (E-Levy), he said the reduction from the initial 1.50 per cent to one percent as the new charge was not fair as the threshold of GH₵100 that attracted no charges had been removed.
“No one is now exempted, so now even if you send GH₵1 or GH₵2, you will pay E-Levy charges on it. This is not right,” he said.
He urged the government to find ways of supporting Ghanaians and bring policies that would help the people to recover what they had lost in terms of capital.
An Entrepreneur and Management Consultant, Dr Bernard Agyei Aryee, said the 2023 budget was an attempt by the government to cut down on expenditure, especially in the public sector.
He said that alone was not enough and that a lot needed to be done in order to achieve fiscal discipline, adding that major structural reforms in the public sector had been heard over and over again, yet nothing had been done so far .
“If those major structural changes are not effected, this little cut and insignificant cuts may not be able to change much. For me, it doesn’t shake the structural fiscal indiscipline that we have,” he said.
Dr Aryee was of the view that the country would bounce back when the International Monetary Fund (IMF) deal went through, adding that some of the major challenges confronting the country like inflation and price hikes must be tackled.
“As it stands now, Ghana may not be able to stop borrowing because our income is not enough, the revenue we are generating is not enough to do major infrastructure projects and because of the way our debt is now, we are not able to borrow much money,” he said
He, therefore, urged the government to focus on increasing internally-generates funds (IGF) and also find innovative ways to rake in revenue so that the country would be able to help clear the debt and position itself at a sustainable level.
BY JEMIMA ESINAM KUATSINU