GRi In Parliament 08-02-99

Dr Kofi Konadu Apraku, minority spokesman on Finance, said at the weekend that the medium-term macro-

economic targets as well as this year's economic targets in the budget statement are ''too optimistic'' and may not be achieved.

He said the figures arrived at, based on last year's projections, are ''suspect'' since Center for Economic Policy Analyses (CEPA) and IMF, among other institutions, have expressed doubts about how those figures were arrived at.

''This is a lame duck budget from a lame duck government. All they have been giving us are figures; if inflation and others have really come down as mentioned, interest rate should come down further. ''I doubt if the deficit declared is correct because this quarter alone, 50 billion cedis has been reserved to clear arrears,'' Dr Apraku said.

The projected macro-economic target for the medium-term in the budget statement are an average real GDP growth rate of 5.8 per cent and an end of period rate of inflation of five per cent.

Dr Apraku said the improvement in the economy does not reflect in the standard of living of Ghanaians.

The positive things about the budget, he noted, are the financial sector reforms which include the introduction of new financial instruments like Mutual Funds and Unit Trust which, when well implemented, will be of great benefit to Ghanaians.

He said there are no innovations in the budget or policy to bring about the needed change in the economy.

''For example, you cannot gain any degree of improvement in agriculture without irrigation, and I did not hear anything about that.''

On the promotion of made-in-Ghana goods, Dr Apraku said so long as interest rates continue to be high, the private sector and industry cannot be competitive.

''Before you can promote something, the quality should be good and the price competitive''.

Dr Apraku said government should note that the private sector in neighbouring countries are getting a better deal and very soon Nigeria will puts its acts together and Ghana will be left behind.

Mr Yaw Osafo-Marfo, minority spokesman on Trade and Industries, said: ''as far as Vision 2020 is concerned and the fact that this financial statement is the last before we enter the millennium, the budget is disappointing''.

There is nothing in the budget to transform the economy. So long as Ghana continues to be a producer of raw materials, ''the emphasis should be on the transformation of these raw materials into finished products''.

Mr Osafo-Marfo said so far as the Vision 2020 is concerned, the economy is not on target, adding: ''the government's own indicators in that document are defeating their targets''.

He said the average rate of growth per annum from 1997 in the document should be eight per cent over the past two years, and, according to the medium-term projections, the economy is performing three per cent below average.

Again, he said, earnings from non-traditional exports should be about 1,250 million dollars but it is now estimated to be bringing in 428 million dollars.

He said, however, that medium-term targets in the budget may be achievable due to the expected revenue to accrue from the Value Added Tax(VAT).

An Economic Consultant, Mr Kwame Pianim, said GDP growth has been around five per cent since 1995. =93There is the need to reverse this trend=94. He said with the =93kind of grace of God agriculture=94 being practiced in the country, it is difficult to predict that projections made by the goernment in the three year programme would be achieved.

Accra (Greater Accra) 8 Feb.

 Mr Mike Allen Hammah, Deputy Minister of Road and Transport, described the budget as "realistic" since it is in line with government's medium-term expenditure framework.

Giving his impressions about this year's budget statement after Mr Kwame Peprah, Minister of Finance, had presented it, Mr Hammah said the budget "takes us a step towards the realisation of our goals set in Vision 2020." Mr Hammah, who is also the Member of Parliament (MP) for Effutu, therefore, urged Ghanaians to co-operate with government to help achieve its set targets.

Mr Emmanuel Baah-Danquah, MP for Asutifi North, described the budget as "forward-looking" since it takes care of most of the weaknesses of previous budgets.

For instance, he said, the budget has been prepared this time to match expenditure with revenue to provide a healthy macro environment for the smooth development of the country.

In his view, Papa Owusu Ankomah, MP for Sekondi, said if government is able to meet challenges facing individuals, then the budget will achieve its objectives.

To this end, he said the government should provide the general policy framework like tax holidays so that a congenial environment can be created for investments.

On Education, Papa Ankomah was of the opinion that what government should do is to resource existing secondary schools, rather than build additional ones as stated in the budget.

Mr Samuel Ofosu-Ampofo, Deputy Eastern Regional Minister, and MP for Fanteakwa, commended the government for giving positive indications in the country's macro-economic framework such as the drop in inflation, coupled with the stabilisation of the cedi against major currencies.

On national security, Mr Ofosu-Ampofo said the breakdown of law and order in the last quarter of 1998 was a matter of grave concern.

He said it is a sigh of great relief that more recruitment will be made into the Police Service this year in addition to the supply of equipment to the service.

On roads, the deputy regional minister said it was heart-warming that the Nsawam-Anyinam road is to be re-located to help reduce the spate of accidents.

Mr Yaw Osafo-Maafo, MP for Akim Oda, said there were no new initiatives in the budget statement, but added that the inflation rate targeted at five per cent, if achieved, will help in the country's economic growth.

Mr Samuel Oppong, MP for Agona West, said the recommendations at the National Economic Forum, which represented the broad spectrum of ideas and opinions of all stakeholders, have been addressed in the budget.

To him, the budget seeks to ensure that adequate resources are allocated to district assemblies to ensure the success of the decentralisation policy.

Mr David Lamptey, MP for Klottey Korle, said this year's budget statement is one of the best because of its "positive indications on agriculture, the bedrock of the nation, and the private sector, the engine of growth".

Mr Lamptey said government's support for non-traditional cash crops is laudable, adding that everything possible is being done to encourage Ghanaians who venture into their cultivation.

 Accra (Greater Accra) 6 Feb.

 The government is to recommend to Parliament to abolish the special tax of 17.5 per cent on imports, the Minister of Finance Mr Kwame Peprah, announced in Accra last Friday.

 Presenting this year budget to Parliament, he said as a consequence of this measure, government has proposed some changes to re-align the duty rates on imported motor vehicles.

 Government has also proposed to reduce the 25 per cent duty on imported computer software and accessories and communication equipment to 10 per cent. Mr Peprah said government also proposes to adjust duty rates of some selected goods in order to enhance the competitiveness of local industries, harmonise rates with those in the sub-region to reduce smuggling and remove any other distortions that might have arisen as a result of the re-introduction of the Value Added tax (VAT).

 The Minister said it is the intention of government that all efforts will be concentrated in ensuring the smooth implementation of VAT.

 "We shall monitor the implementation of this tax on a continuing basis and if there are any changes that may be required to the law, appropriate proposals will be brought to this House."

 Mr Peprah said in the last fiscal year, the Internal Revenue Service (IRS) introduced a pilot scheme to test the self-assessment system of a large number of taxpayers. This will be extended to cover all categories of taxpayers following the success of the pilot scheme. The Minister said a comprehensive review of the Income Tax Decree (SMCD 5) was commenced last year and on completion, a draft bill will be laid before Parliament after consultations with stakeholders including the private sector.

 A bill will be brought to parliament to tighten sanctions on  both defaulting taxpayers and any IRS official who neglects to impose appropriate penalty without reasonable justification, the he said. 

He said the fist phase of the Taxpayer Identification Numbers (TIN) was successfully introduced last year and all 11,214 traders who applied to be registered to collect VAT were issued with the identification.

 He said it has been decided that importers and clearing agents will now require TINs in order to clear goods from every port of entry.

"In addition, all  applicants for tax clearance certificates from the IRS will require TINs with effect from May one."

 Mr Peprah said the Central Bank has instituted measures to facilitate and encourage the use of cheques and other payment instruments other than cash. He said to allow the electronic processing of cheques and reduce the clearing cycle, the Magnetic Ink Character Recognition (MICR) cheques were introduced under the Inter-bank Automated Cheque Project.

 "An on-line clearing system for cheques will be introduced during the course of the year with the aim of eventually attaining real-time gross settlement by the year 2000."

 Mr Peprah said a draft bill to back the electronic transfer of funds will be placed before parliament during the second meeting of the current session. 

The Minister said government has reduced the tax payable by banks on incomes derived from lending to the agriculture sector from 35 per cent to 20 per cent to encourage banks to increase loans to farmers and entrepreneurs in the agro-industrial sector.

 Government has set aside five billion cedis which will be lodged with the Agricultural Development Bank for lending to co-operative societies in the agricultural sector.

 In addition, the Youth in Agriculture Programme (YAP) under which the government and ADB have put together five billion cedis to support young people in the production of selected crops, poultry and livestock will take off this  year.

 The Minister said the government has adopted a number of measures to mop up a large amount of cash being held outside the financial sector.A legislative Instrument on Mutual Funds and Unit Trusts to govern the establishment and operation of these investments will be laid before Parliament before the end of March this year.

 All pending applications properly lodged before the Securities Regulatory Commission for licence to operate Mutual Funds and Unit Trusts will be processed and disposed of before the end of June this year. 

Exemption on capital gains tax on Securities traded on the Ghana Stock Exchange will be extended for at least another five years after the expiration of the year 2000 of the current exemption.

Sunyani (Brong Ahafo) 7 Feb.

Since some goods and services are for the first time being introduced into the tax net with the implementation of the Value Added Tax (VAT), consumers should not expect the prices of all goods and services to go down or even remain at pre-VAT levels. 

Mr Ezekiel Asamoah, National Director of the VAT Service,said businesses such as private communication centres, photo laboratory and laundry services, among others, would register slight hikes in charges because until VAT, they were outside the tax net.

  He was addressing a VAT implementation review meeting at Sunyani organised by the Brong Ahafo Regional VAT Education Committee at the weekend. 

The meeting identified problems associated with the implementation of VAT in the region with the view to finding solutions to them. 

It was attended by representatives of the various district VAT education committees, district chief executives and heads of some government departments.

 Accra (Greater Accra) 6 Feb.

The implementation of the Government's Medium to long-term Public Sector salaries and Wages Policy will start as soon as negotiations between the Central Management Board (CMB) and stakeholders are completed.

 Mr Kwame Peprah, Minister of Finance, announced last Friday when he presented the budget to parliament. As a result of preparatory work, "we are now in a better position to conclude successful negotiations."

 Meanwhile, provision has been made in the budget for the implementation of the new wage policy.

 On the millennium bug, Mr Peprah said the government has set aside funds to supplement the resources available to the Ministries, Departments and Agencies (MDAs) to check the negative impact of the problem and its ramifications on computer systems and equipment in the public sector.

 The national office set up under the Ministry of Communications will also provide advice to the private sector.

 On cocoa, Mr Peprah said recommendations of a workshop to increase production, reduce tax levels and efficiency in marketing through the provision of appropriate infrastructure are being studied by government.

 The Minister said the Ghana Trade and Investment gateway project will commence this year. It will help modernise the equipment and raise human capacity base of CEPS, GPHA, GIPC (Ghana Investment Promotion Council), Immigration Service and Free Zones Board for prompt handling of investors and provision of off-site infrastructure to the export processing zone enclaves.