Finance Minister Mr. Ken Ofori Atta will today [Wednesday], November 15, 2017, present the 2018 budget to lawmakers.
The budget will be second the for the Akufo-Addo administration since it took over the administration of the country in January 2016.
The budget is expected to focus on about 10 key areas including infrastructure, macroeconomic stability, job creation, agriculture, entrepreneurship, business growth, creating a Ghana beyond aid, debt management, corruption, public sector reforms among others, and a continuation of the 2017 budget initiatives.
It will also focus mainly on tax reforms, by specifically roping in many people in the informal sector into the tax net.
The budget is expected to be heavy on initiatives to be introduced by government to block loopholes and rope in the informal sector into Ghana’s tax net.
Currently, the Ghana Revenue Authority (GRA) has 1.2 million taxpayers in its database out of which 200,000 are from the informal sector.
Meanwhile, Ghana as at 2015 had a tax-paying population of 4 million, of which, at the time, only half of that figure were paying taxes.
A number of policies will be introduced to deal with this, including the introduction of the tax stamp, the use of Point of Sale (POS) devices to track all taxes issued, as well as strict adherence to the use of the Taxpayer Identification Numbers (TIN).
Also, there will be the prosecution of public sector workers whose actions lead to tax evasion.
One of the taxes which will see major reform in the 2018 budget is the property tax. The tax, despite its potential is one that has been neglected by tax officials.
Its share of GDP in Ghana is 0.03 percent, compared to an average of 1.8 percent in Organization for Economic Cooperation and Development (OECD) member-countries.
Citi Business News has gathered that Government will be reviewing the property rates to enable property owners pay the right amount.
Public sector reforms
Another area that will see reforms to maximize productivity and efficiency is the public service.
Citi Business News has gathered that the reforms will be spearheaded by the Public Sector Reform Secretariat, which has come up with a five-year program from 2018 to 2023.
The reforms will centre around 6 pillars; Citizens and Private Sector Focus; Capable and Disciplined Workforce; Strengthening Public Sector Regulatory Framework; Modernization and Improved Working Conditions; Strengthened Local Governance Structure and Digitized Public Sector Systems.
Today’s budget will also focus on how Government intends to create jobs through policies and initiatives it intends to roll out. President Nana Addo Dankwa Akufo Addo, earlier hinted that the 2018 budget will focus largely on job creation.
The President said the budget will give meaning to his government’s industrialization agenda which primarily focuses on the creation of jobs.
“The Finance Minister will present the budget to Parliament and it will focus on job creation. The Finance Minister is a magician; he finds resources at places you never expect him to find” the President said.
What’s in for businesses?
One of the key areas the budget will focus on is the business community. The sector has been plagued with a number of challenges, hampering its growth.
These include high electricity tariffs, high interest rates, difficulty in accessing funds and poor skills among others.
In his first budget, Mr. Ofori Atta emphasized that Government will create a conducive environment for businesses to grow the economy and create jobs.
Citi Business News can confirm that the Finance Minister Ken Ofori-Atta will be announcing a reduction in electricity tariffs for businesses in a bid to reduce their cost of operations, whilst the EXIM bank will be recapitalized to adequately serve businesses.
It’s not clear yet whether the stabilization levy, which has been running for years, will be removed in this budget. Business operators have called on Government to remove the tax which was reintroduced in mid-July 2013, as the legislation backing its establishment, set its duration at 18 months.
Thus, the Levy should have been withdrawn at the end of 2014. The reintroduction of the levy was in response to a fiscal deficit incurred in 2012.
Government will also embark on a number of key infrastructural developments which will be captured in the 2018 budget.
Citi Business News has gathered that government will be seeking to increase funds in the Ghana Infrastructure Fund from 250 million dollars to 4 billion dollars, to help government embark on key infrastructure development.
Meanwhile, the 2018 budget, which has been christened the ‘Adwuma budget’ will also focus on agriculture, entrepreneurship, creating a Ghana beyond aid, debt management and corruption, and will also ensure a continuation of some of the initiatives of the 2017 budget which was on the theme ‘Sowing the Seeds for Growth And Jobs’.
The 2017 budget saw the introduction of a number of policy initiates including tax incentives like the abolishment of the 17.5 percent VAT on financial services, domestic airline tickets; 5 percent VAT on Real Estate sales and levies imposed on kayayei (head porters) by local authorities among others.
Other Initiatives introduced in that budget included the “One District One Factory” initiative, the commencement of the implementation of free secondary education in September for the 2017/18 academic year.