Accra, Aug. 18, Mr Kwame Peprah, Minister of Finance today said the government is adopting measures to modify and enhance its revenue mobilisation base as a means of ensuring fiscal balance. Some of the measures are the introduction of tax-payer identification numbers to flush out tax evaders and the tightening of the tax auditing system. Other measures are the implementation of the Draw- Back system which will plug in the holes in the customs and importation tax regime and the Betting Law, among others. Mr Peprah was speaking at a meeting with Mr Joseph Stiglitz, the visiting Senior Vice-President of the World Bank in Accra. Mr Stiglitz is in the country to find out how best the bank can interact more effectively with Ghana to boost her economic recovery. Ghana started pursuing the bank's reforms programme in 1983 and has the World Bank's largest stock of investment in Africa. Mr Peprah said the bane of the country's macro-fixtures has been the ability to achieve projected revenue targets." We succeed most of the time to stay within expenditure corridors." On the Value Added Tax (VAT), he said events that led to its abolition in 1995 are being addressed adding that the government will soon embark on a major educational programme to enlighten the public on its meaning and impact. He said what bedevilled the old VAT system was its impact on prices which ''unfortunately stemmed from the how and what should belong to who''. Mr Peprah said a formalised means of building consensus between the the government, private sector and the Trade Union Congress (TUC) has brought relative wage impact on productivity down thus helping reduce inflation. " The government has managed to bring inflation from 35 per cent last year to 29 per cent this year. '' We hope to get to the 20 per cent mark by the end of the year. Government would ensure that there is no (rpt no) reversal." He asked the World Bank to recognise the new political framework the nation has to contend with in relation to the implementation of its reform packages. Mr Stiglitz urged the government to ensure a balance between government revenue and expenditure. He advised government to evaluate spending, create transparency in the areas where there is one form of subsidy. In an apparent reference to the withdrawal of the recent increase in electricity tariffs, the World Bank official said: "electricity does not come freely, if you charge less than you produce, someone should pay for it". He said Ghana for instance, does not have a realistic pricing of the electricity it produces, saying Ghana produces electricity at six cents and sells at 2 cents, creating a deficit of four cents. Mr Stiglitz said there is no need to continue subsidising because the money could be used for an entirely new project relevant to the needs of the government. He however, cautioned that the issue of phasing in price adjustments must be implemented smoothly.
Accra, Aug. 18, Mr Kwame Peprah, Minister of Finance today said the government is adopting measures to modify and enhance its revenue mobilisation base as a means of ensuring fiscal balance. Some of the measures are the introduction of tax-payer identification numbers to flush out tax evaders and the tightening of the tax auditing system. Other measures are the implementation of the Draw- Back system which will plug in the holes in the customs and importation tax regime and the Betting Law, among others. Mr Peprah was speaking at a meeting with Mr Joseph Stiglitz, the visiting Senior Vice-President of the World Bank in Accra. Mr Stiglitz is in the country to find out how best the bank can interact more effectively with Ghana to boost her economic recovery. Ghana started pursuing the bank's reforms programme in 1983 and has the World Bank's largest stock of investment in Africa. Mr Peprah said the bane of the country's macro-fixtures has been the ability to achieve projected revenue targets." We succeed most of the time to stay within expenditure corridors." On the Value Added Tax (VAT), he said events that led to its abolition in 1995 are being addressed adding that the government will soon embark on a major educational programme to enlighten the public on its meaning and impact. He said what bedevilled the old VAT system was its impact on prices which ''unfortunately stemmed from the how and what should belong to who''. Mr Peprah said a formalised means of building consensus between the the government, private sector and the Trade Union Congress (TUC) has brought relative wage impact on productivity down thus helping reduce inflation. " The government has managed to bring inflation from 35 per cent last year to 29 per cent this year. '' We hope to get to the 20 per cent mark by the end of the year. Government would ensure that there is no (rpt no) reversal." He asked the World Bank to recognise the new political framework the nation has to contend with in relation to the implementation of its reform packages. Mr Stiglitz urged the government to ensure a balance between government revenue and expenditure. He advised government to evaluate spending, create transparency in the areas where there is one form of subsidy. In an apparent reference to the withdrawal of the recent increase in electricity tariffs, the World Bank official said: "electricity does not come freely, if you charge less than you produce, someone should pay for it". He said Ghana for instance, does not have a realistic pricing of the electricity it produces, saying Ghana produces electricity at six cents and sells at 2 cents, creating a deficit of four cents. Mr Stiglitz said there is no need to continue subsidising because the money could be used for an entirely new project relevant to the needs of the government. He however, cautioned that the issue of phasing in price adjustments must be implemented smoothly.
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