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Minority Leader, Mr Haruna Iddrisu
Minority Leader, Mr Haruna Iddrisu

Minority flays govt over tax cuts, abolition

The Minority in Parliament has acknowledged the effort of the government to remove a number of taxes to create space for the private sector. However, it said the measures could have the opposite effect on the economy in view of the lack of corresponding revenue measures to compensate for the loss of revenue that would occur.

At a press conference in Accra yesterday, the Minority Leader, Mr Haruna Iddrisu, said the only notable measure in the 2017 budget presented to Parliament by the Minister of Finance, Mr Ken Ofori-Atta, last Thursday was the policy on scrapping some tax exemptions granted to some firms undertaking some projects in Ghana.

That measure, he said, was counterproductive because “the amount of tax exemptions for projects, especially those undertaken through borrowing, are deducted from the cost of the loans,

so removing the exemptions will only lead to an increase in the cost of loans and ultimately lead to an increase in the public debt”.

He said the most important test of the effectiveness of the measures would be determined by a significant reduction in electricity and fuel prices and general reduction in the cost of living promised by President Nana Addo Dankwa Akufo-Addo.

Besides, he said, the reduction must be translated into employment for the teeming youth of the country. 

‘Broken’ promises

The Minority Leader said the budget was full of broken promises, as it failed to demonstrate how the government intended to fulfil many of the promises in the 2016 NPP manifesto.

Besides, he said, the budget indicated that the government had no magic wand to conjure the sort of creativity required to generate additional resources to finance the many campaign promises of one district, one factory; one village, one dam, and the free senior high school (SHS) education programme.

Mr Iddrisu said the budget was a deception and ‘419’ which had disappointed many Ghanaians, including students hoping to enjoy free SHS education, people looking for jobs and business executives expecting promised tax reductions.

He mentioned the inability of the government to extend the free SHS to cover continuing students, the silence on the payment of contractors, reduction of corporate tax, electricity tariffs and transportation fares as some of the broken promises.

Free SHS

Starting with the free SHS programme, Mr Iddrisu said there was a “clear deception” regarding the programme in the budget, as it stopped short of fulfilling President Nana Akufo-Addo’s campaign promise to make it instantly free for all junior high school (JHS) students He said the campaign promised that at least GH¢3.6 billion would be provided for in the budget to cater for

the needs of an estimated 840,000 SHS students due to be in school in the 2016/2017 academic year.

However, he said, the budget painted a different picture by indicating that only first-year students

in the 2017/2018 academic year whose number was given as 467,692 would benefit from the programme.

Besides, he said, the budget was silent on the President’s promise that all day students would be fed once daily.

“The day students and their parents were expectant and have been disappointed by this twist of events,” he said.

Flanked by leaders and members of the Minority, Mr Iddrisu said more worrying was the fact that neither cost nor source of funding was put to the free SHS programme, “save a vague mention of the limited Annual Budget Funding Amount (ABFA) from our petroleum receipts and other domestic revenue sources”. 

He said if the GH¢400 million being bandied about by some NPP communicators as the total cost of the programme was true, it would be inadequate to cater for even one term of free SHS.

“In lieu of this, let President Akufo-Addo admit that his promises of free SHS were not properly thought through and make the necessary arrangements to explain why a different approach to what was promised is being adopted,” he said. 

Other ‘broken’ promises

Mr Iddrisu said the budget did not capture the campaign promise to pay all arrears to contractors within 100 days of President Akufo-Addo’s administration.

Again, he said, the budget was silent on the promise to pay all customers of DKM, God is Love, Jasper Motors, among other such agencies, who lost money as a result of microfinance scams in the Brong Ahafo Region in particular. 

The Minority Leader said the budget failed to capture the promised reduction in corporate tax from 25 per cent to 20 per cent, the promise to remove import duties on raw materials and machinery for production, the pledge to reduce drivers’ levies and cost of licence or the promise to reduce electricity tariffs and transportation fares. 

Capping of statutory funds

Mr Iddrisu said the Finance Minister hid behind what he termed “rigidities” to launch a raid on statutory funds and mentioned the proposal to cap statutory fund payment at just 25 per cent of revenue as an example.

“This is only an euphemism for the diversion of badly needed money from the District Assemblies Common Fund, the Ghana Education Trust Fund (GETFund) and the National Health Insurance Levy (NHIL) to finance the ‘one this, one that’ campaign mantra of

the NPP. 

“Such diversions will have disastrous consequences for vital sectors of the economy such as

education, health and the provision of social infrastructure,” he said.

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