House rejects Fiscal Stabilisation Levy Bill
Parliament has rejected the National Fiscal Stabilisation Levy (Amendment) Bill placed before it by the Minister of Finance on November 28, 2013.
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The House adopted the report of the Finance Committee, which had recommended that the passage of the bill was premature and, therefore, urged the House to not approve it.
The bill was intended to amend the National Fiscal Stabilisation Levy Act, 2013 (Act 862) to revise the end date of the National Fiscal Stabilisation Levy.
The government, in an attempt to ensure fiscal stability, introduced the National Fiscal Stabilisation Act, 2009 (Act 785) in the second half of 2009 to raise funds for national development.
The Act was repealed in 2011 following the recovery of the economy. However budget overruns, as a result of increasing wage bills, threatened to crowd out investment in critical sectors of the economy.
There was, therefore, the need to re-impose the levy to help generate revenues to support the shortfalls in the budget.
The period for the levy was 18 months and was due to end on December, 2014.
Rationale for the Bill
The National Stabilisation Levy was introduced in June this year purposely to support the shortfalls in the budget and stabilise the fiscal economy.
However, considering the measures and tax regimes introduced, the fiscal economy is anticipated to stabilise by June, 2014, hence the need for the amendment to limit the operation of the National Fiscal Stabilisation Levy to June, 2014 instead of December,2014.
Finance Committee's View
The committee was of the view that the circumstances that led to the reintroduction of the levy still existed and that explained why other tax measures had been introduced in recent times to raise additional revenue to finance rising government expenditure.
However, since the proposed effective date for the amendment was July, the committee did not want Parliament to pass a bill in anticipation of an improved or stabilised fiscal economy by June, 2014.
It said the bill should, therefore, be introduced in June, 2014 when the fiscal situation had improved and stabilised.
The decision, according to the committee, was expected to generate additional revenue of approximately GH¢78.05 million.