Business News of 2014-04-01

‘We’ll introduce measures to reduce tax evasion’

The Finance Minister, Seth Tekper says the Ministry of Finance will soon introduce new measures to minimize tax evasion in the country.

“The Ministry of Finance has initiated a process to change the exemption regime to a credit and refund regime to minimize abuse of tax evasion at our borders,” he said.

According to him, tax measures being introduced by the Ministry “goes beyond the sole objective of raising revenues or even addressing the current challenges currently.” “We broaden the tax base, address inefficiencies and make the regime fairer to all our taxpayers,” he explained.

According to him, the tax measures were also introduced to add more revenue. “Together with ongoing improvements in revenue administration, these tax measures are estimated to raise additional revenue of not less than 700 million or 0.7 percent of GDP in 2014.”

He also revealed that the Ghana Investment Promotion Centre Act has been reviewed to ensure that the tax exemptions granted are consistent with government policies. The Minister of Finance made this revelation when he delivered a statement in Parliament on the state of the economy.

Some including the 2012 vice presidential candidate of the NPP, Dr. Mahamadu Bawumia have criticized the government’s handling of the economy predicting the Minister may have to approach the International Monetary Fund (IMF) for funds to run the country.

The nation’s currency has been depreciating against some of the major trading currencies in spite of measures introduced by the Bank of Ghana. Fitch Ratings recently also revised the Outlook on Ghana’s Long-term foreign and local currency Issuer Default Ratings (IDR) to Negative from Stable and affirmed the ratings at ‘B’.

The agency said “revenue underperformance and intractable expenditure on wages and interest led to a budget deficit of 10.8% of GDP in 2013, wider than the government’s target of 9%.This combined with a sharp 20% depreciation of the exchange rate, caused government debt to rise to 61.8% of GDP in 2013 from 48.9% in 2012.”

Mr. Tekper said government will introduce “broad public sector reform” in a bid to contain the rising public wage bill.