The Akufo-Addo government's 2017 budget statement does not reflect reality and will lead to the biggest financial deficit in the history of Ghana, Kweku Ricketts-Hagan, a former Deputy Minister of Finance, has predicted.
According to him, the government will not be able to raise the revenue for most of the things it has stated in its budget for the year.
During the reading of the budget statement on Thursday 2 March, Mr Ofori-Atta, mentioned, among other things, the scrapping of excise duty on petroleum products. The government also intends to reduce the special petroleum tax rate on petrol from 17.5% to 15%.
Other taxes that will be completely abolished include the following:
1. The 1% special import levy
2. The 17.5% VAT on financial services
3. The 17.5% VAT on selected imported medicines not produced locally
4. The 17.5% VAT on domestic airline tickets
5. The 5% VAT on real estate sales
6. Duty on importation of spare parts
Also, the 17.5% VAT imposed on traders has been replaced with a 3% flat rate, while businesses that employ young graduates from tertiary institutions will get tax credits and other incentives. Furthermore, there will be tax incentives for young entrepreneurs while the Corporate Income Tax will be progressively reduced from 25% to 20% in 2018.
Additionally, Mr Ofori-Atta said the Akufo-Addo government would initiate steps to remove import duties on raw materials and machinery for production.
However, speaking on TV3’s New Day on Saturday 4 March, Mr Ricketts-Hagan, who is Member of Parliament for Cape Coast South, said: “This budget is problematic, it will lead to the biggest deficit,” adding: “You (government) will not be able to raise revenue to do all you are saying.
“This is a disjointed, unrealistic, and disconnected budget.”