‘Austerity budget’ – Isaac Adongo explains

Isaac Adongo (NDC- Bolgatanga Central MP) has explained why the Minority in Parliament described the 2021 budget and economic policy of the Akufo-Addo administration as an “austerity budget”.

“Because the very people who are impoverished by COVID-19, who are sitting home and are yet to find their feet and go back to work, you are asking them to pay more,” Adongo told Citi TV in an interview on Monday monitored by GhanaWeb.

He added that the measures put in place by the current administration “are the measures that are taking more from the poor than the rich”.

Adongo explained further: “if I have GH¢10 and my income is GH¢100 and I go to buy something and you are taxing me GH¢2; somebody who has GH¢1,000,000 buys the same thing and you tax him GH¢2 who is paying more.”

He stressed that such tax policies in the budget make the 2021 budget a “retrogressive tax”.

“My mother who sits in the village and [lives] her organic life in the forest is not polluting the forest. You and I are in the city polluting the forest and you are saying that when that poor woman manages to harvest some onions and okra and goes to the market to buy a tin of milk, she must pay taxes so you can come and clean the cities…why do you want somebody who is not polluting the environment to pay for someone who is polluting the environment?” he quizzed.

He added: “As for the reliefs if you tell me that everybody [who] now has the Ghana Card automatically has a Tax Identification Number (TIN), are you [exempt] from filing your taxes at the end of the year? So, he is only suspending the preventive tax, but when you come to file because you own a TIN because you are a taxpayer, you will pay.”

The 2021 budget statement and economic policy of the Akufo-Addo administration proposed new taxes on petroleum products, one per cent COVID-19 Health Levy on the VAT Flat Rate Scheme and one per cent on the National Health Insurance Levy (NHIL).

There is also a financial sector clean-up levy of five per cent on profit-before-tax (gross profit) of banks.

Osei Kyei-Mensah-Bonsu, Minister for Parliamentary Affairs, who presented the 2021 Budget to Parliament last Friday in Accra on behalf of President Akufo-Addo said these levies would be reviewed in 2024.

“The financial sector clean-up and the refund of monies to depositors have restored investor confidence and protected the hard-earned savings of millions of Ghanaians. However, this has come at a huge cost of over GH¢21.0 billion to the government,” he explained.