Mr. Victor Selormey, Deputy Minister of Finance told Parliament on today that taxes may have to go up to help meet the shortfalls in Ghana's revenue earnings. Briefing the House on the "State of the Economy", Mr. Selormey said this forms part of government measures to arrest the decline in revenue and its impact on planned expenditures.
He said other measures such as the tightening of administrative and other procedures in the tax system and the sourcing of grants from external sources would have to be applied to keep the economy moving. The Deputy Minister made it clear that since the government does not believe in "unduly increasing the debt burden", it is unlikely that "it will increase borrowing substantially to cover the shortfall in revenues". Mr. Selormey said the nation cannot continue to rely on aid from donor agencies, and therefore stressed the need for self-reliant. "We have to do all we can, if donor aid is to be meaningful and effective. If we are going to ask for support from the donor community, it will be useful to demonstrate firstly that we recognize the problems and difficulties that we face and also demonstrate our preparedness to do something about them."
Mr. Selormey said government has shown restraint in its expenditures and has against all adversity been able to keep the macro situation relatively stable by prudently managing its finances. The economy, he indicated, has shown resilience, adding, "We have demonstrated that we can withstand the severest of shocks. What is required now is how we can turn this event around and make it the last time that this economy has to go through such pain again." The deputy minister, however, admitted that all sectors of the economy would be adversely affected at least over the next 12 to 18 months. For instance, he said, real gross domestic product projection, which was to hit 5.5 per cent, has to be revised downwards to 4.4 per cent.
