The Finance Minister’s bid to mobilize at least GH¢65.8 billion in domestic revenue next year is achievable given the several reforms undertaken in the past 12 months, Bernard Avle, host of the Citi Breakfast Show has said.
In presenting the government’s 2020 budget statement to Parliament earlier this week, the Finance Minister, Ken Ofori-Atta, announced a projected revenue which is more than 22 percent of this year’s target without introducing a major tax policy.
Given that the Akufo-Addo-led government is yet to meet its domestic revenue target, concerns have been raised as to whether 2020 would be any different.
However, Mr. Avle speaking on Citi TV’s news analysis programme What the Papers are Saying on Thursday, said the government’s tax measures and reforms in the revenue collecting agency could finally pay off if they exhibit ample commitment and do what is right.
“I think if you look at the stuff they have done at the port and the kind of changes we have seen at GRA; the kind of leadership we have at GRA would determine for example the level of taxes they are able to get. I don’t think the tax target is over-ambitious. I don’t think so at all,” he said.
Achieving the 2020 domestic revenue target, he argued, would also depend on the government’s ability to rein in the massive tax concessions given to corporate organizations and other institutions.
It is estimated that more than GH¢2.6 billion was given out in tax exemptions in 2017 alone, more than 15 percent of the previous year figure.
Mr. Avle stated that aside attempts by the government to deal with the phenomenon using a legislative approach, public pronouncements made by Chairman of the GRA Board provides assurance that the situation is being treated with the urgency that it rightfully deserves.
The Finance Minister in presenting the last budget of the Akufo-Addo administration for the first four years, sought Parliament’s approval to expend GHS87 billion on planned programmes and activities.
Despite the estimate for 2020 representing a growth of 21.2 percent above the projected out-turn for 2019, Mr. Ofori-Atta indicated that he is targeting a budget deficit of 4.7 percent of GDP – below the 5 percent ceiling set in the Fiscal Responsibility Act.
Mr. Avle, commenting on the nature of the 2020 budget said the Finance Minister had a tough job of delivering a budget that protects macroeconomic gains achieved during the 3-year IMF bailout, as well as gives the government room to pursue projects that are enough to sway the electorate to maintain the Akufo-Addo government.
“You have a very serious mix of things that are trying to make this budget a high stake one. I think the Finance Minister has done a clever job by trying to make everybody happy.”
“I don’t know how long he can keep everyone happy because if for instance the financial sector reforms do not result in paying people quickly to push liquidity into the system; if the Sinhydro projects don’t come on stream as anticipated, we are going to be in a lot of trouble,” he added.