National Reconstruction Levy down to 10 per cent from 15 per cent
Speaker assures MPs on overdrawn accounts
Accra (Greater Accra) 02 April 2001
The National Reconstruction Levy (NRL) is now at 10 per cent down from the 15 per cent proposed in the budget statement presented to Parliament by Mr Yaw Osafo-Maafo, Minister of Finance, on March 8.
In the budget statement, Mr Osafo-Maafo said the levy was "to be sourced from banks, pension funds and insurance companies, which will contribute 15 per cent of their gross profit after providing for bad and doubtful debts during the period 2000 -2002."
However, the Bill which was passed on Friday lists 16 financial institutions with high turnover to pay 10 per cent levy on their net profit while 21 with less strong financial base would pay 7.5 per cent on their operations after tax.
Mr Yaw Osafo-Maafo said the passage of the NRL bill is a direct way of taxing the financial giants to relieve the over taxed poor.
The fundamental purpose of tax "is to tax the one who has the ability to pay", he said
Mr Osafo-Maafo said it is a way of making money cheaper to the private sector by generating sufficient money to service the domestic debt of government and consequently reduce high interest rate.
He said the bill will have no retrospective effect as earlier contained in the 2001 budget and that the management of the institutions have agreed to pay up front on quarterly basis starting from the end of March this year.
The levy shall be implemented for two years after which there would be a review and that rural banks and non-banking financial institutions are exempted from payment.
He commended the House especially the Minority for putting in suggestions in the making the law.
Speakers on the Minority side feared that the introduction of the tax would be injurious to the private sector with the explanation that no investor would like to invest in an area where taxes are heavily imposed.
Papa Owusu-Ankomah, the Deputy Majority Leader described the bill as the best ever law to be passed by any government in the country.
He thanked the Minority for enriching the law with useful suggestions. Mr Osafo-Maafo moving for the Airport Tax Bill said it is to be increased from 20 dollars to 50 dollars for flights to destinations outside the country and 10,000 cedis for internal flights.
He said the increase has become necessary in view of the current economic realities.
The tax would be collected by The Ghana Civil Aviation Authority, which is not subvented, would collect the tax and retain 40 per cent of the revenue.
GRi../
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Accra (Greater Accra) 02 April
2001
The Speaker, Mr Peter Ala Adjetey
on Friday gave the assured Parliament that the Governor of Bank of Ghana will
surely be brought before the House to explain the issue on the alleged
overdrawn 900 billion cedis during the last quarter of last year.
The Speaker's assurance came when
Mr Kosi Kedem, NDC Hohoe South raised the issue that Parliament was to go on
recess on Friday and that the Governor had not appeared before the House as he
had been requested to do.
Mr Kedem wondered when the
Governor would be appearing before Parliament to brief the Committee of the
Whole House on the account saga.
Mr J. H. Mensah, the Majority
Leader, explained that since the matter cropped up, Parliament has been trying
to bring the Governor before the House and that he would come after the recess.
The Speaker at that juncture said
the Governor would by all means be invited to the House during the second week
of the second session of the third Parliament.
The overdrawn accounts issue has
become a bone of contention between the Minority and the government and created
doubts in the minds of the public since the issue was raised on March 9 in the
Minister of Finance, Mr Yaw Osafo-Maafo's budget statement to Parliament.
He said that during the last
quarter of last year the previous National Democratic Congress (NDC) government
withdrew 900 billion cedis from the Central Bank.
Mr Victor Selormey, former Deputy
Minister of Finance, challenged the overdrawn accounts issue saying as far as
he was aware there was never any occasion when the government decided to
withdraw such an amount from the coffers in the last quarter.
He declared his preparedness to
put his reputation on the line and added that there was something fishy
somewhere.
According to newspaper
publications the Bank has explained that 600 billion cedis of the amount was
used to finance oil import bill.
Earlier, Mr Mensah announced that
Parliament would reconvene on May 8.
GRi../
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