Minority threatens to boycott budget approval if...
The Minority in Parliament has threatened to boycott the approval processes of the 2017 Budget and Economic Statement if the government fails to make changes to portions it described as a breach of the 1992 Constitution.
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The government, in the 2017 budget, which was presented to the House on March 2, 2017 by the Minister of Finance, Mr Ken Ofori-Atta, allocated GH¢1.57 billion to the District Assemblies Common Fund (DACF), an amount the Minority said fell short of the constitutionally mandated five per cent of total revenue which is to be allocated to the DACF.
The Minority Spokesperson on Finance, Mr Cassiel Ato Forson, contributing to the debate on the budget on the floor of Parliament on March 9, said this was a clear violation of the 1992 Constitution and must, therefore, not be authorised.
He said the minority will consider boycotting the entire process of approving the budget if steps were not taken by the government to act within the law.
“This side of the House will not be part to approve a budget that seeks to breech part of the Constitution. We would not be part of that because the constitution is emphatic,” he stated.
He said five per cent of projected tax revenue of GH¢34.382 billion should be GH¢1.71 billion instead of the GH¢1.57 billion captured for the DACF in the 2017 budget statement.
The DACF was created under Article 252 of the Constitution to serve as a mechanism for the transfer of resources from the Central Government to the MMDAs.
The Article provides that five per cent of Ghana’s total revenue should be paid into the Fund for distribution to the local authorities.
To operationalise this constitutional provision, Parliament also enacted the District Assemblies Common Fund Act (Act 455) in July 1993 to provide further legislation and detail on the administration of the Fund.
Majority disagrees
The Minister for Monitoring and Evaluation and Member of Parliament for Old Tafo, Mr Anthony Akoto Osei, however disagreed with the minority.
He explained that “when you take the tax revenue, you need to net out tax refunds, you need to net out GRA costs of collection and need to net out royalties.”
He said this would bring the total tax revenue to GH¢31.442 billion, which when divided by the GH¢1.57 billion would be 5.09 per cent.
The Member of Parliament for Atiwa East Mrs Abena Osei-Asare, in an interview with the GRAPHIC BUSINESS said the rigidities in the statutory payments, together with interest payments, and wages and salaries left no room for government to operate.
She said it was therefore necessary to re align them to ensure that government does not borrow much to finance its projects.
In 2016, transfers into the statutory funds constituted 33.5 per cent of national revenue, up from 28.2 per cent in 2015.
Mrs Osei-Asare said this was expected to increase to 41 per cent this year if government does not cap it.
Cap on statutory funds
The Minority believes that the development was as a result of the government’s decision to cap statutory payments at 25 per cent of the country’s total revenue, a move that has also led to the shrinking in the allocation to the DACF.
The Minister of Finance, when he presented the 2017 budget statement and government’s economic policy in Accra on March 2, indicated that the government was going to initiate moves that would ensure that statutory funds do not exceed 25 per cent of the country’s total revenue in a year.
This meant that statutory payments into the National Health Insurance Fund, Ghana Education Trust Fund, the District Assembly Common Fund, Road Fund, Energy Fund, transfer into the Ghana National Petroleum Company, retention of internally-generated funds by Ministries, Departments and Agencies (MDAs) and other earmarked funds have been constrained to a ceiling of 25 per cent of tax revenues.
This is expected to create some fiscal space for the government to fund some of its flagship projects which include the free senior high school, the one district one factory, and the one million dollars one constituency projects.
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