Government to 'outsource' public sector payroll management – Ofori-Atta

Finance Minister Ken Ofori-Atta has said the Akufo-Addo government will soon hand over the management of the public sector payroll to a third party in order to achieve efficiency.

Currently, the Controller and Accountant General’s Department is in charge of handling all public sector payrolls.

Presenting the mid-year budget review to parliament on Thursday, 19 July, Mr Ofori-Atta told the house that: “Mr Speaker, as a way to ensure an efficient payroll management system, which then guarantees cost reduction, quicker payroll processing, data and cost validation, accountability payment validation and improve overall efficiency, government is currently evaluating options to outsource the payroll processing for its employees”.

The minister said the move is aimed at addressing “public sector wage bill [concerns] and its crowding out effect on public expenditure”, with the overall goal being the achievement of a “convergence criteria of 35 per cent wage bill to tax revenue in the West African Economic and Monetary Union from the current 48 per cent”.

Meanwhile, all luxury cars with an engine capacity of 3.0 litres and above, will attract a tax of between GHS1000 and GHS2000.

“On the under-performance for the first five months of 2018, we will end the year with an estimated deficit of 4.9% of GDP compared to the programmed target of 4.5%, resulting in a fiscal gap of GHS870 million, unless we immediately implement some fiscal measures; intensive tax compliance measures, New revenue measures, Intensive Conversion of NHIL (2.5%) to a straight levy, Conversion of GETFund VAT rate of 2.5% to a straight levy, Imposition of luxury vehicle tax of GHS1,000 – GHS2,000 on non-commercial vehicles with capacity of 3.0 litres and above, review of PIT to include an additional band of GHS10,000 and above per month at a rate of 35% and downward adjustment discretionary expenditures”, the minister told parliament.

Mr Ofori-Atta also said categorically that there will not be any increase in Value Added Tax (VAT) as widely speculated.

It had been reported by some media houses that the government intended increasing VAT from 17.5% to 21.5%.