General Government Services estimates gets the nod
Accra (Greater Accra) 03 March
2000
Parliament on Friday passed the
Value Added Tax (Amendment) Bill after the legislative proposal had gone
through a stormy consideration stage.
This was after Mr Kwadwo
Adjei-Darko, NPP-Sunyani West, had moved a motion for an amendment to Clause
One of the bill stating that the 2.5 per cent increase in the rate of tax from
10 per cent to 12.5 per cent "shall be paid exclusively into the
Educational Trust Fund", which is yet to be established.
Mr Adjei-Darko said even though
the memorandum to the bill explained that the 2.5 per cent increase is to be
put into the Education Trust Fund, this intent is not spelt out in the bill.
Clause One of the bill states:
"The Value Added Tax Act, 1998 (Act 546) referred to in this Act as the
'principal enactment', is amended in Section Three by the substitution for '10
per cent' of 12.5 per cent".
Mr Adjei-Darko wanted his
amendment to be part of Clause One to leave no doubt as to the intent of the
2.5 per cent increase.
Seconding the amendment motion, Mr
Kwadwo Baah-Wiredu, NPP-Asante Akyem North, said if the intent was translated
into the bill, it would leave no doubt in the minds of people as to the use to
which the 2.5 per cent would be put.
Mr Doe Adjaho objected to the
amendment, saying it was "unnecessary and mischievous".
He explained that there is a
clause in the proposed Educational Trust Fund Bill currently before Parliament,
which caters for the intent to which the additional 2.5 per cent rate of tax
would be put.
Mr J.H. Mensah, supporting the amendment,
said if, indeed, there was any such intention, it should be translated into the
VAT amendment bill itself.
Mr Moses Asaga, a Deputy Minister
of Finance, called for the rejection of the amendment, saying a statutory
obligation captures the intention of the 2.5 per cent tax. Therefore, its use
was not going to be at the discretion of the Ministry of Finance.
Mr Albert Kan-Dapaah, Minority
Spokesman on Mines and Energy, said if the amendment was not acceptable to the
Majority Group, then the funds that would accrue from the 2.5 per cent tax
would not be used for the intended purpose.
Mr Modestus Ahiable, NDC-Ketu
North, said though the amendment looked harmless, it would be setting a bad
precedent because apart from introducing rigidity into the law, it would create
doubt as to the use of the money collected.
Nana Akufo Addo said all that the
amendment sought to do was that monies realised from the 2.5 per cent VAT
increase would go into a specific fund for a specific purpose of funding
education, quoting sections of Article 175 and 176 (2) (a) to support his
assertion.
Article 175 states in part:
"There shall be paid into the Consolidated Fund...all revenues or other
monies raised or received for the purpose of, or on behalf of, the
government...and any other monies raised or received in trust for, or on behalf
of, the government".
Article 176 (2) (a) states:
"The revenue or other moneys to be paid into the Consolidated Fund shall
not include revenues or other monies that are payable by or under an Act of
Parliament, into some other fund established for a specific purpose..."
Nana Akufo Addo said the Minority
would have opposed the 2.5 per cent increase had it not been meant to support
education.
Mr Kwame Peprah, Minister of
Finance, said the amendment was not necessary because the purpose of the 2.5
per cent additional VAT was captured under the Educational Trust Fund Bill.
Mr J.H. Owusu-Acheampong, Minister
of Food and Agriculture and Member for Berekum, suggested that the House should
consult the Parliamentary draught person on the matter.
But Nana Akufo Addo disagreed with
the suggestion, saying: "It is not a draughting matter. The legislative
intent should be translated into reality and that is what we are seeking".
Mr Peprah told the House that when
the draught person was consulted, she explained that, to maintain consistency,
the proposed amendment need not be put into the bill. He assured the Minority
funds will be used for the intended purpose.
Mr Adjei-Darko said the
Educational Trust Fund Bill still remains a legislative proposal and any
amendment to it could be made at the Committee level.
He suggested that, to resolve any
doubt in the use of monies accruing from the 2.5 per cent VAT, the Educational
Trust Fund Bill should be passed before the VAT amendment bill.
After the debate on the amendment
motion, Mr Kenneth Dzirasah, First Deputy Speaker, who was in the Chair, put
the question and the amendment was lost by 107 votes against and 44 in favour.
In another amendment motion, Mr Kan-Dapaah moved that the VAT Act "shall not come into effect until the Educational Trust Fund Bill is passed and come into force and of effect".
Mr Yaw Barimah, NPP-Koforidua, seconded the amendment motion and said there would be no justification to impose an additional tax burden on Ghanaians until the Educational Trust Fund Bill comes into force.
Dr. Apraku said when the original bill was laid before the House in November, last year, it did not make any mention of an educational fund.
"We now know what the fund will be used for but we don't know where it will be kept since the Educational Trust Fund is not established.
Dr. Kwabena Adjei, Leader of the House, described the amendment as "bogus", saying: "we are not going to debate it, so Mr Speaker, put the question".
The Minority Leader, however, disagreed with Dr. Adjei and explained that it is at the consideration stage that members consider all options to a bill and it was, therefore, unfortunate for the Majority Leader to tell members to "close their minds to every suggestion".
He said the purpose of the additional VAT tax would become clear when the Educational Trust Fund Bill was passed.
"It is a conscious amendment to save the people of Ghana. They shall not begin to pay out of their pockets until the purpose of the additional tax is stated."
Mr Kan-Dapaah said the Constitution makes its obligatory for specific funds such as the additional 2.5 per cent VAT to be put into a fund, adding: "Ghanaians should not expect that the fund would be used for the intended purpose".
"Until the Educational Trust Fund Bill comes into effect, the 2.5 per cent increase should not be levied on the good people of Ghana.
"The Majority Leader is on record as having said that the amendment is bogus, when we are insisting on accountability and probity," he said.
Mr Peprah assured the Minority that the levy would be imposed only when the Educational Trust Fund Bill comes into force.
Mr Victor Selormey, Deputy Minister of Finance, said every fund collected for or on behalf of the government is paid into the Consolidated Fund.
He explained that even if such funds are in a separate account, they still form part of the Consolidated Fund, and the amendment was, therefore, invalid and should not be entertained.
When the Speaker put the question, the amendment motion was defeated in a voice count but the Minority, not satisfied, called for a head count.
The outcome indicated that the amendment motion had been lost by 111 votes to 49.
Mr Mensah, Minority Leader, took his turn to move an amendment to the effect that any monies collected under the law should be placed in a separate fund and not be used for any other purpose other than what it is intended.
His amendment motion followed the way of the previous ones, as it was also defeated through a voice count.
The Minority protested that the Speaker had only allowed vote on those against the amendment and insisted that he put the question for both sides.
The Minority Leader said he was entitled to wind up the debate on his amendment motion but Mr Dzirasah explained that winding up debate on a motion had evolved as a matter of practice and the circumstance under which this was allowed was at the discretion of the Chair.
Consequently, when he put the question as to whether or not Clause One of the VAT (Amendment) Bill should become part of the bill, there was a massive shout of "yes" from the Majority.
The two-clause bill is now subject to Presidential assent to become law. The Value Added (Amendment) Bill seeks to increase the rate of tax from the current 10 per cent to 12.5 per cent.
The 2.5 per cent increase is to be channelled into the Education Trust Fund approved by Cabinet to be set up by the Ministry of Education to support quality education at all levels.
It also seeks VAT exemptions for active ingredients of listed essential drugs.
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Accra (Greater Accra) 03 March 2000
Parliament on Friday approved the 2000 estimates of General Government Services that stands at 1.3 trillion cedis by voice count.
The estimates cater for expenditure that has general application to all sectors, ministries, departments and agencies (MDAs) that depend on the consolidated fund as a balancing item.
Moving for its approval, Mr Kwame Peprah, Minister of Finance, told the House that 453.2 billion cedis is to be provided from the government sources while the remaining 819.8 billion cedis will be sourced from donors.
He mentioned the 2000 population and housing census and the new Ministry of Planning, Regional Economic Co-operation and Integration as some of the main arrears to receive the funds.
The Minister said 954.9 billion cedis is to be set aside for MDAs to be used to top up administration, service and investment costs and additional costs that may become necessary in the course of the year for MDAs.
Dr. Kofi Konadu Apraku, Minority Spokesman on Finance, said the Ministry of Finance was being given too much discretionary power in the financial administration of the country.
He asked the House to consider Article 177 (Clause One) of the constitution that provides for the setting up of a contingency fund to cater for unforeseen expenditures.
The ranking member said in such a situation, the discretion given to the Ministry is unwarranted.
On the new Ministry, Dr. Apraku lauded its establishment but wondered how the estimates for it came about, adding that no information justifying the estimate had been made available to the House.
On point of order, Mr Victor Selormey, a Deputy Minister of Finance, said information had been provided but might have come late.
Dr. Apraku said the projected 70 billion cedis for the payment of arrears on services provided by MDAs was a good idea.
He, however, criticised the Ministry for not giving the House any idea about the magnitude of arrears to be cleared.
The member said it was unfortunate that such information was beyond the reach of the House, and hoped it did not contain any clue to financial impropriety.
Squadron Leader Clend Sowu (Rtd), NDC-Anlo, advised against the setting up of a contingency fund since the nation's political history had shown that such funds were seriously abused.
Winding up, Mr Peprah allayed the fears of members that the Ministry had no discretion over the disbursement of the monies involved.
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Accra (Greater Accra) 03 March 2000
Parliament is to resume on Tuesday, 9 May, after a month's long break, Dr. Kwabena Adjei, Minister for Parliament Affairs, announced on Friday.
Dr. Adjei made the announcement when presenting the business statement for the first week ending Friday, 12 May 2000 of the second meeting.
He told the House that members would be exceptionally busy in view of the forthcoming elections and urged a judicious management of time during the meeting.
He reiterated strict application of the standing orders in the conduct of business, adding that question time should not exceed one hour at any sitting.
In this connection, Dr. Adjei said to ensure effective implementation of the decision only four questions should be scheduled for any sitting day and no member shall ask more than three questions at any one sitting.
He urged the House to re-programme outstanding motions and bills that could not be taken due to heavy schedules during the first meeting in the early stages of the second meeting.
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