What to expect from the government’s 2024 budget and economic policy

The Minister of Finance, Ken Ofori-Atta, is expected to deliver the 2024 Annual Budget Statement and Economic Policy of the government before lawmakers in Parliament on Wednesday, November 15, 2023.

The presentation is in accordance with Article 179 of the 1992 Constitution and section 21 of the Public Financial Management Act, 2016 (Act 921).

Ahead of the presentation, the Ministry of Finance has hinted at how the budget will be modeled.

In a statement issued on November 14 and sighted by GhanaWeb Business, it noted that the crucial economic policy has been developed to support the implementation of the IMF-backed Post-COVID-19 Programme of Economic Growth (PC-PEG).

The Ministry added that the budget will also highlight, among other things, the performance of the economy, efforts to boost the productive capacity of the economy through the new Growth Strategy, fiscal measures, and debt management strategies to deepen stability and promote growth.

Ghana is currently under an IMF Extended Credit Facility Programme of $3 billion spanning a three-year period. The Fund-supported programme is expected to restore macroeconomic stability, support balance of payments, and address debt sustainability issues.

The country has so far clinched the first tranche disbursement of the funds consisting of $600 million with the hope of reaching an agreement with external creditors before a second disbursement is facilitated by the IMF.

Meanwhile, several trade unions, economists and the stakeholders in the business community have been sharing their expectations ahead of the budget.

They believe the government must not introduce new taxes in the budget but must implement critical measures to address the tax system, adopt innovative revenue generation measures, and chart a path towards debt sustainability, among others.

For instance, GUTA wants the government to restructure the Value Added Tax (VAT) system to ensure the same rate is paid across board.

The Association argues that the system currently has loopholes where some businesses often pay a rate of 22 percent, others paying 4 percent, while others are completely exempted from VAT due to meeting the threshold of GH¢200,000 worth of goods.

“The consumer has the discretion of buying what he or she wants, the one paying 22 percent VAT and those paying 4 percent VAT stand at a disadvantage since their goods are likely to be priced high while those not paying any VAT at all sell at affordable prices and are able to make good sale,” President of GUTA, Dr Joseph Obeng noted.

In addition, the Traders Advocacy Group Ghana (TAGG) has called on the government to scrap what they describe as unnecessary taxes in the budget.

The group in particularly wants government to scrap the COVID-19 Health Levy imposed on goods and services and network service charge imposed at the ports.

President of the group, David Kojo Amoateng, explained that removing these taxes will further cushion traders, citizens and the business community, amid the current hardships in the country.

“How can you charge me a network service charge!? the network charge is something that has to go,” he advocated.

For the COVID-19 Levy, the TAGG president proposed that the government should either scrap the tax measure or rename it to tackle other critical areas such as health [kidney disease treatment or cancer].

“We from the trading sector expect that even if the COVID levy will not go, maybe there will even change the name to dialysis, kidney or cancer,” he said on Accra-based Citi TV’s Point of View on November 13, 2023.

MA/NOQ

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