Finance Minister Seth Terkper says the country is not broke, but dealing encountering a few fiscal challenges to be scaled.
He said the Ghana Revenue Authority is performing “very well” despite a few challenges which are being addressed through a series of revenue measures announced by President John Mahama a few weeks ago.
“If we generate revenue and spend a higher than proportional [amount] to pay wages and interests, that does not mean that we are not deriving our revenues. We are deriving the revenues. GRA is doing well; it’s performing well even though it has its own challenges…but that by no means, means that we are not collecting enough revenues and, therefore, the nation is broke”, Mr. Terkper emphasised.
Assessing the performance of the economy for the first half of the first year of the Mahama Administration at an ongoing retreat for ministers and deputies at the Peduase Lodge in the Eastern region on Monday July 8, the minister said the government has put in place measures to shore up revenue mobilisation.
According to him, the government has been able to make some adjustments to petroleum subsidies as well as made realistic estimates for corporate income tax on petroleum.
Additionally, the finance minister said a 5% national stabilisation levy has been introduced together with the imposition of a 1 to 2 percent levy on imports, albeit with some exemptions coupled with the ongoing implementation of a moratorium on the award of new contracts.
Mr. Terkper said the actions taken by the government are primary measures meant to originally stabilise the budget.
However, in the process of doing that, the minister said the government attempted effecting two corrections to the tax regime by tweaking the Communications Service Tax (CST) and the Environmental tax.
He clarified that the CST, which he insisted is not new, was to be clarified as an excise rather than a Value Added Tax.
He said the same clarification applied to the Environment tax.
An amended version of the CST has been suspended following a fierce resistance by the Ghana Chamber of Telecommunications, following its introduction in Parliament last week.
