By: Africanus Owusu-Ansah
‘’ And my God will meet all your needs according to the riches of glory in Christ Jesus”
“…… tasking the GRA to collect 33% more revenue this year was based on the Finance Ministry’s test of the system which led to the discovery of loop holes which could be sealed to increase revenue.”
Honourable Ken Ofori-Attah, Minister of Finance.
Daily Graphic report: Friday, March 10, 2017
BESIDES THE PRESIDENT, Nana Addo Dankwa Akufo Addo and his Vice, Dr Mahamudu Bawumia, the next person who needs the prayers of Ghanaians most is the Minister of Finance, Mr Ken Ofori Attah. Following on the heels of the Minister of Finance is the Commissioner-General of the Ghana Revenue Authority, Mr Kofi Nti. Theirs is a herculean task, but they need to fulfill the mandate of satisfying the populace- at all costs, and not render the campaign promises mere rhetoric.
The 2017 Budget was bold in its attempt to free Ghanaians of the burden brought by a variety of taxes introduced by the NDC to fill the revenue shortfall in the country. The NPP had described some of these taxes as ‘nuisance taxes.’ A ‘nuisance tax’ is generally described as tax imposed on very small amounts on the purchaser, and same transmitted to the taxing authority.
Among the many luscious tax reliefs and tax incentives were the following strategic things government seeks to do: abolish taxes on raw materials and machinery, abolish special import levy: abolish the 17.5% VAT on financial services: abolish 5% VAT on real estate sales: abolish the 17.5% VAT on domestic airline tickets: reduce VAT for micro and small enterprises from the current 17.5% to the 3% flat rate introduced by the Kufour Government: give tax credits and other incentives to businesses that employ young graduates: reduce tax exemptions: review withholding taxes imposed on various sectors, including mining: abolish the duty on spare parts; abolish the levies on ‘Kayayei; reduce the 17.5% VAT on the Ghana stock Exchange to 3.5%.
Besides these, there was mention of free education for all, beginning the coming 2017/2018 academic year. The one district one factory would start. Each constituency was to be given $1m to help combat poverty. There was going to be one dam in every village in the north.
Before Mr Ken Ofori Attah had exhausted the litany of reliefs and tax- incentive packages in his ‘asempa’ budget, the opposition NDC MPs had got ready and were displaying cards which read ‘419’ Budget; thus depicting the budget as a scam from confidence tricksters; the implications were that the budget was deceptive; that the budget was not going to achieve the stated objectives.
‘419’ refers to a section in the Nigerian Criminal Code which deals with fraud, and the charges and penalties related thereto. It is like calling the budget a ‘West African scam’ or a ‘Nigerian scam’. The ‘419’ in Nigeria is like Section 131-135 in Ghana (Act 29: Criminal Offences Act of 1960) which deals with ‘fraud by false pretences’. It is not clear why the Parliament of Ghana would adopt a pejorative term from Nigeria, and apply it in Ghana- could this not be a breach in diplomacy?
Meanwhile, there was spontaneous jubilation in all the cities, towns and villages of Ghana. The Abossey Okai, Kokompe and Suame Magazine Spare parts dealers were all-praise for the Government for removing the duty on spare parts. To be a devil’s advocate, it could be that the spare parts dealers may presume that the abolition of duty on spare parts means the abolition of all taxes- but VAT and other imposts are still there to be paid. The ‘Kayayei’ were dancing because the ‘nuisance levy’ of 50 pesewas (GHC 0.50) imposed by local authorities per day had been removed. For some people, even if such a coin drops from their pockets, they would not stoop to pick it up; but not so in the case of these ‘mmoborowas’, whom Frantz Fanon would describe as ‘The Wretched of the Earth’. The Finance Minister interpreted the NDC reaction thus: ‘’ I thank you, honourable members for the somewhat fire baptism you gave me. I saw 419 budget…It reminded me of the Bible: Philippines 4:19, and that gave me strength.’’
For some of the NDC Members of Parliament, the 2017 Budget was flawed. Honourable Richard Quashigah, MP for Keta thinks the NPP failed to put forward original ideas to create jobs and also there was no originality on how to implement other initiatives. Haruna Iddrisu criticizes the NPP for not making provision for the payment to the DKM customers swindled by that financial institution in Sunyani, especially. But Afenyo Markins, the NPP MP for Efutu rather thinks the NDC “…is gaining notoriety for spreading falsehoods.” Mr Kwabena Duffuor, the Ex-Minister of Finance is careful not to unduly criticize the budget:“We agree that accelerated growth of the economy is critically needed, but that cannot be achieved in adverse fiscal and macro-economic environments. Once the economic fundamentals become stabilized and strong, it is easier to achieve growth.”
At a post budget forum in Accra, the Finance Minister noted that government would improve revenue collection- to cover shortfalls in tax reliefs. As reported in the Daily Graphic of Friday, March 10, 2017, one of the loopholes detected was: “… where the (value) on a Final Classification and Valuation Report (FCVR) was GH¢ 31,000. However, after the taxpayer negotiated to pay GH¢ 1,000 to an officer, the value on the FCVR was reduced to GH¢ 8,000 for the same consignment’’.
For the ordinary reader, such an observation may mean next to nothing. But for those who know what goes on in the valuation and classification of goods, this is seen as a serious indictment. It leaves one wondering whether the report was issued by one of the private destination inspection companies ( DICs). If not, then it should be the Customs Classifications and Valuation Report (CCVR) issued by the Customs Division of the Ghana Revenue Authority, and that is where one who has been ‘there’ before must show concern. The ‘big issue’ is that some people fought hard- at the risk of their lives and comfort- to return the Classification and Valuation to Customs as their core functions. The private companies fought hard to keep the job ceded to them by the Customs Authorities on the government’s directives. In the end, good sense prevailed, and the job was taken over by Customs- without fanfare and without a thank you to those who fought to get this restoration. People do not even know how it all began; how many Customs officers fell victim to the evil machinations-from within and from without. Until investigations of what really happened, and the ‘officer’ is identified…some of us will keep asking questions. For the meantime, officers at the unit responsible for Classification and Valuation now will only be advised to keep their hands clean. This has been the same way Customs had been labelled or mis-labelled just to deny the institution of its desserts.
Of course, money will be needed for the various activities government has undertaken to perform. Fortunately, honourables, Carlos Ahenkorah (MP for Tema West and Kofi Brako (MP for Tema Central) as well as Titus Glover (MP for Tema East) belong to the NPP. They know the loopholes in the system, and they can assist the government with relevant advice and strategies on how to get the funds. There is money at the Ports (Tema and Takoradi). Let’s go for it. More anon.