Business News of 2014-07-11

Let’s revisit laws on statutory funds – Terkper

Minister of Finance, Mr. Seth Terkper is proposing an amendment that would relax government’s obligation to statutory funds when the country is in financial crisis.

As it stands now the government has no excuse to expend monies meant for the various statutory funds whether it is faced with credit crunch, or difficulty in raising substantial revenue to honour those obligations.

The Finance Minister therefore sparked a debate on Joy FM’s Super Morning Show Friday that it is time laws making payment of statutory funds compulsory are revisited so that concessions could be made when government is financially challenged.

The minister’s proposal is coming on the heels of a Fast Track High Court’s ruling which instructed the Ministry of Finance to fulfill its statutory obligation to the Ghana Education Trust Fund (GETFund).

The government is obliged to allocate 2.5% of Value Added Tax collected to the Fund, according to the Ghana Education Trust Fund Act, 2000 Act 581. The same Act gives Parliament the free hand to also allocate money for the Fund.

But the government has been in arrears to the Fund since 2013, necessitating a court action initiated by a youth activist of the New Patriotic Party, Richard Nyamah who put the figure at GH¢ 500 million.

The Fast Track High Court in Accra ruled in his favour on Thursday.

Justice L.L Mensah, who presided over the case, described government’s failure to pay statutory funds to the GETFund as illegal and ordered the Ministry of Finance to pay all arrears, owed the Trust Fund.

Seth Terkper indicated government will not contest the court’s decision.

Students on government of Ghana scholarship scheme in the United Kingdom (UK) and other parts of the world said they were going through difficult times due to the failure of the GETFund to settle their bursaries.

But all can breathe a sigh of relief if the Finance Minister keeps his promise to obey the court’s ruling.

Government was keen on honouring its statutory obligation, Mr. Seth Terkper said, but explained payment delayed because government was unable to raise sufficient revenue.

Going forward, the president and cabinet would have to find solutions to the recurring challenge of government’s indebtedness to the Fund, he remarked.

“We do respect the decision of the court. This is not the first time we have had a court to take a decision; but I must also say that it also raises the issue [of what to do with] the statutory funds in a period of crisis. What should be done for them to be part of the management of the crisis.

“I presume that when you take a strict legal approach, the law doesn’t address that issue but this is probably the time for us to address that issue, that in a period when the country is going through crisis, and everybody is making sacrifices, statutorily if that is what we put in the law, should we also revisit the law to accommodate situation where the country is in a crisis.”

Meanwhile, Ghanaian medical students on government scholarships in Cuba claimed they have been forced to resort to selling their belongings to feed themselves because their allowances have not been paid for nine months.

Speaking to the claims, Mr. Terkper admitted the situation is “regrettable” but assured that government has made arrangement for the Cuban students to be paid.

Source: myjoyonline.com
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