Coronavirus levy not to pay for free water, electricity of 2020 – MoF

The Ministry of Finance had dismissed reports that Covid-19 levy is to be utilised in paying for free water and electricity of 2020. Again this is incorrect.

This comes after Information Minister, Kojo Oppong Nkrumah had earlier said that the proposed new taxes are to help offset the gap created as a result of the government’s COVID-19 expenses.

A statement issued by the Ministry said the “Ministry also notes media reports suggesting that Government has announced that the Covid-19 levy is to be utilised in paying for free water and electricity of 2020.

“Again this is incorrect. The Minister of Information’s comment to the effect that covid-19 expenses include water and electricity ought not to be misconstrued to mean the new taxes of 2021 are a direct charge for those services.”

Below is the full statement:

The Ministry hereby informs the general public that these publications are incorrect. The GH¢1.7 billion reflects expenditures on only two items under the Covid-19 related expenditures, namely, Covid-19 Alleviation Programme 1 (CAP1) and Emergency Preparedness and Response Plan 1. Other Covid-19 expenditures were COVID-19 Alleviation Programme 2 (CAP2), COVID-19 Preparedness Plan 2, Provision of Health Infrastructure, Seed Fund for Capitalisation of Development Bank, among others.

As at end-December 2020, Ghana incurred a revenue shortfall of GH¢11,942.7 million and expenditure increase of GH¢14,074.2 million in relation to their respective targets in the 2020 Budget passed in Parliament in November 2019.

The amount of GH¢16.8 billion referred to in Appendix 12B only provided information on sources of financing the fiscal gap resulting from the Covid-19 pandemic. These monies were sourced from the IMF (GH¢5,853 million), AfDB (GH¢405.7 million), EU (GH¢504 million), and BOG Covid-19 Bonds (GH¢10,000 million), among others. For the avoidance of doubt, Appendix 2A of the 2021 Budget Statement indicates that total financing for 2020 was GH¢44,897.9 million and not GH¢16,460.4 million.

The Ministry also notes media reports suggesting that Government has announced that the Covid-19 levy is to be utilised in paying for free water and electricity of 2020. Again this is incorrect. The Minister of Information’s comment to the effect that covid-19 expenses include water and electricity ought not to be misconstrued to mean the new taxes of 2021 are a direct charge for those services.

The details of the usage of funds from the Covid-19 levy are listed on Page 75 of the 2021 budget as follows:

Procurement, distribution and administration of vaccines ‒ the first batch of 600,000 doses from the COVAX Facility have already been delivered and an additional 17,600,000 vaccine doses to be delivered by June, with more to come in the course of the year. As at Wednesday 10th March, 2021, over 262,335 Ghanaians received the first dose of the vaccines;

Establishment of fourteen (14) medical waste treatment facilities across the country for safe disposal of medical waste in collaboration with the private sector;

Thirty-three (33) major health projects approved for implementation at a cost of €890 million;

To date, 14,600,000 pieces of personal protective equipment produced domestically and distributed to health workers, students, teaching and non-teaching staff of tertiary and secondary educational institutions;

Fumigation and disinfection of public places including, airports, markets, schools, hospitals, offices etc.;

Agenda 111 ‒ the construction of 100-bed District Hospitals in 101 Districts with no hospitals, seven (7) Regional Hospitals for the new Regions, including one for the Western Region, the construction of two (2) new psychiatric hospitals for the Middle and Northern Belts, respectively, and the rehabilitation of Effia-Nkwanta Hospital in the Western Region; and

The need to recruit more health care professionals, in addition to the 100,000 recruited in the first term of the President.

As part of our open door policy, the Ministry is ever ready to provide further information and clarifications on the 2021 Budget and related matters. The media is highly encouraged to contact us to verify or confirm fiscal issues at any time.