Big Issue: 2024 Budget - Tax cuts
The government has announced a raft of tax measures in the 2024 Budget.
The measures include zero-rated Value Added Tax (VAT) on locally produced sanitary pads for five years, import duty waivers on raw materials for local manufacture of sanitary pads for five years, a tax-free portion of individual income tax rates to be adjusted and engaging the Ghana Medical Association on waivers for importation of vehicles, among others.
What do you expect these measures to do for individuals, businesses and households?
Kudus Seidu Gbeadese Issifu, Head of Advocacy, Settle Ghana
Taxation is a key handle every government uses to manage an economy.
Aside from it being the biggest and reliable handle for revenue mobilisation, governments can use taxation to boost or discourage consumption, boost production or encourage industrialisation by protecting local industries, among others.
Some of the tax measures announced in the 2024 Budget, especially those that are meant to protect local industries and boost local consumption such as locally produced sanitary pads, are welcome and look good on the face of it.
However, the government ought to measure demand against supply in an attempt to protect local industries.
The legitimate question is, do the local industries have the capacity to produce to meet the demand?
Aside from this, there are other tax handles that these industries are saddled with already so, the few measures announced might just be a drop in a cup.
onsidering the economic situation Ghana finds itself in now, tax measures are supposed to be given a thorough assessment as to their validity and reliability in terms of impacting the lives of ordinary people rather than just making such announcements that will only create a political conversation in favour of the government.
Although they sound good on the face of it, the expected positive outcomes might be difficult to achieve.
I just hope this is not one of the many slogans that appeal to the ear but are empty.
Felix Kofi Mantey, Executive Director, Institute of Security Policy & Research
Contrary to the claim by the Finance Minister, Ken Ofori- Atta, that Ghana’s economy is butted, and bruised but not broken, the reality is, Ghana’s economy is broken, fractured and at intensive care unit with the International Monetary Fund (IMF).
The reality of the nature of the economy must be admitted to rally popular support to mobilise citizens to fix it.
‘Instead of the theme: Pursuing Growth & Development within a Stable Macroeconomic Environment’, the ideal theme befitting Ghana’s case should be: ‘Pursuing Recovery in a Challenging Macroeconomic Environment for Growth’.
Such a theme will speak to Ghana’s reality.
The problem of the economy of Ghana is structural.
The 2024 Budget did not address any of them to ensure recovery from intensive care, IMF.
These include unregulated government expenditure, low revenue generation, excessive government borrowing, corruption and high levels of importation for goods and services.
The consequences are exchange rate volatilities, inflation hikes, interest rate hikes, high debt to GDP, unemployment, high cost of living, etc.
Addressing the structural issues will build a resilient economy and the government can achieve its medium-term policy development objectives.
Failure to address those structural problems, and instead announcing tax measures in the 2024 Budget is a mere formality, tokenism and a charade, which will not meet the needs of the Ghanaian.
Ghana’s tax regime, rather, requires review to streamline them to ensure compliance.
There are too many taxes most of which are nuisance, collapsing businesses, eroding income and must be taken off.
Gilbert Arhinful Aidoo, Political Science Lecturer, University of Education, Winneba
The government’s 2024 Budget named ‘Nkunim’ (victory) presented by the Finance Minister, Ken Ofori-Atta, last Wednesday to Parliament outlines several measures aimed at, as he intimated, achieving fiscal consolidation, macro-economic stability and growth.
Even though I feel that the various interventions proposed, particularly those flagged in Paragraph 74 (i-viii, p. 18 & 19) promise to boost local manufacturing and cushion many Ghanaians, there is more to be desired.
Indeed, I am personally overwhelmed with joy at the announcement of a zero VAT and import waiver for local sanitary pad producers.
This gesture may significantly reduce the financial burden on many girls and women who can’t afford hygienic periods.
Admittedly, the few proposed tax waivers, when religiously implemented, will not only boost local industrialisation and economic growth; more importantly, they may have significant rippling effects on the prices of goods and services, cost of living and living standards of many Ghanaians.
However, we should be cautious in celebrating these promises as very little information is put in the public domain yet on these issues.
We should also bear in mind those new taxes that are in the offing to augment existing ones as revenue-boosting measures.
Finally, I cannot agree much with Joe Jackson (Director of Operations, Dalex Finance) that we know too little yet and thus we cannot do proper assessments of the real impact of the 2024 Budget on both the economy and the many stuff.
Daniel Ampim Adu, Public Relations Consultant
The efficacies and unintended consequences of tax reforms must be critically evaluated, considering the living conditions of the average Ghanaian.
The 2024 Budget statement presented to Parliament by the Minister of Finance, Ken Ofori-Atta, last Wednesday, highlighted a number of tax measures, which will bring relief to Ghanaians.
The zero-rated value-added tax (VAT) on locally produced sanitary pads, and import duty waivers on raw materials for local manufacturers of sanitary pads are all important for the establishment of local industries.
The onset of menstruation changes a girl’s life and is often used to mark her entry into womanhood — a natural biological process, which has a strong sociocultural connotation.
The tax cuts, in my estimation, are significant in addressing menstrual hygiene management and the challenges faced by the female population.
Another great news amplified was the adjustment review mechanism in place to address tax-free portions of individual income tax rates.
This will help address the plight of the populace.
Another milestone worth celebrating is the government’s plan of engaging practitioners under the GMA on waivers for the importation of vehicles, aimed at easing the transportation burden of our doctors, who play a pivotal role to achieve and sustain optimal healthcare delivery in Ghana.
I personally think that when all these essentials are executed well, individuals, businesses and households will stand a better chance of living happily as citizens, which will go a long way to halt brain drain activities within the state, and improve our living standards as a people.