The Minister designate for Finance, Mr Ken Ofori-Atta, has described the 2021 Budget Statement as a rallying cry to Ghanaians to join forces with the government to salvage the economy from the ravages of the COVID-19 pandemic.
He said the pandemic had wreaked grave havoc on lives and livelihoods, such that only a united front, ready to share the burden and sacrifice a little for the nation, would help reverse the consequences, mitigate the impact and put the economy back on track.
Speaking yesterday for the first time since he flew to the United States of America (USA) for the treatment of post-COVID-19 complications in mid-February, Mr Ofori-Atta said the budget that was presented on March 12 would lay the needed foundation to build back from the devastating effects of the COVID-19.
He was contributing to a virtual post-budget review engagement organised by the auditing and accounting firm, Pricewaterhouse Coopers (PwC), to provide insights into and perspectives on the 2021 budget that was presented by the Minister of Parliamentary Affairs and Majority Leader, Mr Osei Kyei-Mensah-Bonsu.
On the theme: ‘Consolidation, completion and continuity', the 2021 budget was the nation's first revenue and expenditure estimation to be presented by a non-Finance Minister and it majored on roads, industrialisation and digitisation.
“Truly, I think this is a seminal budget; it is a rallying cry to all of us, as a country, to ask: ‘what are we all going to do to make sure that COVID-19 does not sink us?'” he said.
Mr Ofori-Atta said the budget was premised on “an incredible period of renewal for us, as Ghanaians, to get our economy back to where it was or where it should be going”.
Tot that end, he said, the budget aimed to bring the debt stock back to sustainable levels, narrow the deficit through improved spending and increased revenue collection and stimulate growth.
He, therefore, defended the tax proposals in the budget as a necessary means to raise revenue to bring the deficit back to the five per cent of gross domestic product (GDP) threshold and fund the economic recovery programme.
Mr Ofori-Atta said it was also an avenue to share the burden with the populace in an effort to revive the economy and clean up public finances.
“We held our own through 2020, and that also meant that revenues were hit and expenditures went up. So we have quite scary statistics if you look at real numbers with regard to interest payments and compensation, as opposed to the percentage of revenue that we have. These are structural issues that we have to fix,” he said.
Speaking further to the tax measures, he said each of the measures was well thought out to address specific challenges facing society.
In that context, he said, the government had resolved to ensure that the funds to be collected were used for the intended purposes.
Mr Ofori-Atta said the five per cent tax on the gross profits of banks meant “there has to be a collective responsibility by players for the actions and inaction of their counterparts”.
“We have seen the robustness of the sector since the clean-up exercise, and roping them in as a shared burden philosophy is the way forward. It is such that at the end of the day, all of us have to recognise the enormity of the challenges that we have with regard to certain rigidities,” he said.
The Minister designate further appealed to the umbrella bodies of companies in the country to muster the courage to point out the ills of their counterparts, saying that such actions had a collective impact on their general good.
Impact of digitisation
Mr Ofori-Atta said the Ministry of Finance was confident that the introduction of digital solutions into tax collection and administration would help boost inflows and move the country's tax-to-GDP ratio to about 20 per cent.
He commended Mr Charles Adu Boahen, the President's Representative at the Ministry of Finance and immediate past Deputy Finance Minister, for holding the fort in his absence.