Business News of Thu, 9 Mar 20176
Atiwa MP silences Minority on budget
The New Patriotic Party (NPP) Member of Parliament (MP) for Atiwa East in the Eastern Region, Abena Osei-Asare, got the minority National Democratic Congress (NDC) members agitated when she said in 2016 alone the NDC government wasted a whopping GH¢4 billion on “needless upfront tax exemptions” on duties to individual corporate groups instead of the money being used to fund the much-touted free secondary school education.
She said NDC’s 2016 budget also asked ministries, departments and agencies to also negotiate and conclude contracts that granted tax exemptions without the approval of parliament, stressing that under the NPP, the government is using just 0.01% of Gross Domestic Product (GDP) to finance the free secondary school education.
“NDC’s GH¢4 billion tax exemptions alone in 2016 amounted to 2% of GDP which was a huge money to fund free education and other important things,” she pointed out to a thunderous ‘hear, hear’ from the majority while the minority members said the tax exemptions were granted by parliament and not the executive.
Madam Abena Osei-Asare, who was contributing to the debate on the 2017 budget statement, said the NPP would seriously consider replacing upfront tax exemptions with the issuance of tax credits and treasury credit notes.
“Mr Speaker, NPP’s 2017 budget has indicated that this government will no longer grant exemptions and tax reliefs upfront but rather applicants will fully pay all applicable duties and taxes and later apply with justifications for refund,” she said, stressing that the visionary policy by the government is a clear demonstration that the NPP is boldly solving a problem that the NDC failed to solve.
According to the Atiwa East MP, the bold approach taken by the NPP government would block revenue leakages and then leave the government with more money to develop the nation.
She said the NDC government stated passionately in its 2011, 2015 and 2016 budget statements that earmarked funds for interest payment, amortization and statutory payments were taking so much of the tax revenue but failed to take any action to remedy the situation and that was the reason why the NDC relied so much on borrowing.
“Mr Speaker, we must applaud the NPP government’s effort to cap transfers at 25% of total tax revenue so as to leave the nation with some fiscal space to take on other national projects and also reduce our dependency on loans for projects outside these three budget line items,” she averred
The MP, who is a member of the Finance Committee, also noted that the creation of the Diaspora Fund in the budget is an innovative ingenuity that will enable the government access relatively cheap funds for national development.
“Mr speaker, I want the government not only to tap into the Diaspora Fund, but also into the expertise, experience and technical know-how of Ghanaian Diasporans,” she concluded and the majority said Ms Osei-Asare had on the commemoration of ‘Women’s Day,’ boldly silenced the minority.
The MP for Ofoase/Ayirebi, Kojo Oppong-Nkrumah, refuted claims by the minority that the cedi had taken an unprecedented nose-dive in the first quarter of 2017 under the NPP administration – depreciating by 6%.
He said that it had been the normal situation where the cedi suffers the same fate after huge imports are made during the Christmas time because averagely, the cedi since 2000 had been depreciating by 5% in the first quarter of the year.
He indicated that worse scenarios had even happened under the NDC where in 2009 the cedi depreciated by 12% in the first quarter; in 2014 it depreciated by 18% in the first quarter of the year and in 2015, it depreciated by 15% in the first quarter therefore the minority must not create unnecessary panic over the cedi since the 2017 budget has put in place adequate and pragmatic measures to stabilize the currency.
The chairman of the Finance Committee and MP for New Juaben South, Dr Mark Assibey-Yeboah, who moved the motion for the debate, said 6.5% projected growth in the economy by the 2017 budget is the highest in the last six years.
He said the government had given huge tax incentives and reliefs that would free the private sector and expand the sector to help create more jobs for the youth.
According to the chairman of the Finance Committee, GH¢219 million had been budgeted for the resuscitation of distressed companies in the country; and that would also help create additional jobs.
He said the additional GH¢219 million Zongo Fund budgeted would also help create more jobs for the teeming unemployed in the Zongo communities and help improve businesses of women in the Zongo areas.
The ranking member on Finance and MP for Ajumako/Enyan/Essiam, Ato Forson, gave a clear indication that the NDC would boycott the approval of the budget because according to him, cutting down on the statutory funds, especially the District Assembly Common Fund below 5% of total revenue is in clear breach of Article 252 Clause 2 of the Constitution which says that at least 5% of total revenue must be committed to the District Assembly Common Fund.
Today's Business News