National Democratic Congress Member of Parliament for Bolgatanga Central, Honourable Issac Adongo has lambasted the members of the Bawumia-led economic management team, describing them as "myopic and mediocre people".
Mr Issac Adongo launched a scathing attack on the Vice President for not having the strategic understanding of government business, describing the NPP's economic management style as one that only satisfies the famous "Ceteris paribus" phrase.
Speaking on Tuesday at the maiden lecture by a civil society group, Coalition For Restoration, the Charted Accountant chided the the New Patriotic party for playing too much propaganda with taxation in the aviation sector and yet "run away" from it in their 2018 Budget.
"The NPP thought if you remove taxes businesses in the aviation sector will expand, air fares will definitely come down and all of a sudden everybody would want to move into aviation,that is their understanding," he said.
"And this what I call the ceteris paribus economic management -all things being equal, the lower the taxes in aviation, the higher the expansion of activities in aviation."
The NDC's tax policy was demonised by the New Partriotic party, describing them as nuisance taxes and therefore reduced – 17.5 percent VAT/NHIL on domestic airline tickets.
The President Akufo-Addo in October announced that the reduction on domestic airfares has brought significant increase in passenger throughput from 302,270 as at September, 2016, to 373,429 as at September, 2017, representing a 23.5% increase.
However Mr Adongo, in his delivery at the Mensvic Hotel in Accra, downplayed the effects of the reduction, saying it does not represent the concerns raised by the industry players.
"If you understand the constraints within the confines of the aviation and you ask the aviation players what is their biggest problem, they will tell you that the most important cost driver and the most important price build up for them is not the value added tax,"Adongo said.
"It is about that fact they have rented or leased a lot of aircraft, they have leased in some instances the aircraft and the crew and they pay the lease for 24 ours but only get to work for 8 hours. So at the end of the day you have 16 hours of idle time."
"So in order to recover the 16 hours that the aircraft are grounded, you will need to factor that into the pricing of air tickets. Therefore, if you able to provide an opportunity for these aircraft to be in the air for about 20 to 24 hours, you will immediately will begin to get what we call budget airline situation in the country but they will drastically reduce the price of airfares because they are optimizing the use of that fix cost,very basic,"he added.
He said the NDC under John Mahama had identified all these concerns and was working towards implementing a policy that would have addressed the situation.
The Member of parliament explained that with NDC's strategy to expand airports in the country to allow aircraft fly at night, the aviation industry would have still remained a more profitable sector.
"So if the NDC government under his excellency John Mahama then decided that one way to address that was to expand the availability of airports across the country,so that it will increase their roots,provide the navigation equipment that will allow them to fly at night and to land at night, so that these aircraft will run 20 hours a day and as a result it does not matter the taxes you put on them."
"But you have these incompetent people and mediocre tell us that the reason why the aviation industry is not doing well is because the value added tax.So the aircraft go to Tamale, Kumasi and Takoradi and 6pm they have closed."
"Cant you see the myopic, mediocre thinking group of people we have as economic managers?and this policy was propounded by a PHD holder in economics, who is the head of the economic management team"
Tuesdays lecture by the CFR was to analyse the 2018 budget by the New Patriotic party and according to MrAdongo, the NPP,despite its harsh criticism of the NDC on taxation, has run away from its propaganda statement of reducing taxes to boost production.
"....Not just that it became a propaganda statement in their manifesto, it became a Government policy that in 2018,they ran away from it.They didnt even go back to mention taxation to production in their budget. he added.
By Fiifi Abdul Malik/ghanaguardian.com