Business community, economist welcome budget review

BY: Emmanuel Bruce
Minister of Finance, Ken Ofori Atta
Minister of Finance, Ken Ofori Atta

A section of the business community has commended the government for not introducing new taxes in the 2021 mid-year budget review.

The community, which includes the Ghana National Chamber of Commerce and Industry (GNCCI) and the Ghana Union of Traders Association (GUTA), also commended the government for not increasing existing taxes, in spite of missing its revenue target by GH¢4.1 billion in the first half of the year.

An economist and lecturer has also described the mid-year budget as generally satisfactory.

Presenting the mid-year budget review to Parliament yesterday, the Minister of Finance, Mr Ken Ofori-Atta, emphasised that he had not come to the House to request for additional money nor introduce new taxes.

Views

In an interview with the Daily Graphic, the Chief Executive Officer (CEO) of the GNCCI, Mr Mark Badu-Aboagye, said the chamber’s expectations were met, while its proposals to the government were considered.

“We made a proposal that there should not be any introduction of new taxes or increment in existing ones and that was considered. Basically, our expectations were met and we are satisfied with the budget.

“This is just a review and we were not expecting many policies and strategies, but once we didn’t see any new taxes, we are okay,” he said.

Economy picking up

Mr Badu-Aboagye indicated that the chamber also appreciated the fact that the economy was picking up gradually, looking at the macroeconomic indicators.

“We are on a path of recovery and we need to sustain that,” he stated.

He, however, said he looked forward to enough policies in the main 2022 budget to further stimulate the private sector to be able to grow and expand to employ more people.

“The government employs just about one million people, which is just about four per cent of the labour force. The rest is being employed by the private sector, and so we need to be supported to employ more,” he said.

GUTA is satisfied

The President of GUTA, Dr Joseph Obeng, in a separate interview, said his members were satisfied with the mid-year review because it did not introduce new taxes.

He noted that businesses were not in good times and it was, therefore, a good decision by the government not to introduce new taxes or increase existing ones.

On whether GUTA was looking forward to a review of some of the new taxes that were introduced in the main budget, he answered in the negative, saying that “these taxes have already been introduced and people have got used to them. We also appreciate the fact that the government has to achieve its revenue target”.

Expanding tax net

He said GUTA was, however, looking forward to an expansion of the tax net, especially to rope in traders in the e-commerce subsector.

“This is very important to us, as we think taxes are being paid by a few of us, which is not good. We expect the tax net to be widened because the traditional way of doing business is being overshadowed by e-commerce, but that area is not being taxed by the government, which is not fair,” Dr Obeng said.

He said some businesses were now taking place through e-commerce platforms and they must, therefore, be made to pay taxes as well.

Generally satisfactory

An economist and lecturer at the Academic City University College, Mr Eugene Bawelle, also in an interview, agreed that the mid-year budget presentation was generally satisfactory.

“The minister listened to a lot of the suggestions from businesses and academia and it is good news that he did not ask for more money to spend, which means the government has spent within its budget.

“He also indicated that he had not come to ask for more taxes, which means that the government acknowledges the current situation in which businesses and individuals find themselves,” he added.

Mr Bawelle said his only disappointment was with the revenue bit, as the government did not provide enough measures to boost revenue mobilisation.

“It appears that this government has not done so well when it comes to revenue. In the last four years, revenue, as a percentage to GDP, has hovered around 12 per cent, which is not the best, so I expected to hear some new revenue generating opportunities.

“I wanted to see how they are going to raise enough revenue without borrowing or introducing new taxes, but I didn’t see that,” he noted.

The economist said while the government had done well in digitising the economy, it had not been able to leverage that drive to rope in more revenue for the country.