GRi in Parliament - Budget 2001 - 10 - 03 - 2001
Tax relief for
workers, companies
Government to assist cocoa farmers to
increase yield
External debts set
to rise, but domestic debts to come down
2000 growth rates
were below target - Osafo-Maafo
Government to
publish energy policy
Government to
resolve and minimise land disputes
Education gets
highest allocation
Tax relief for
workers, companies
Accra (Greater Accra) 10 March
2001
The minimum taxable personal
income has been raised from 900,000 cedis to 1.2 million cedis with effect from
January this year, Finance Minister Yaw Osafo-Maafo said in this year's budget
statement on Friday.
The top marginal tax rate of 35
per cent applicable to incomes in excess of 17.4 million cedis is now
applicable to incomes in excess of 48 million cedis, he said.
He also said that the top marginal
tax rates for employees and the self-employed have been reduced from 25 per
cent to 20 per cent for the middle and upper income groups.
The tax rates for the upper income
groups have also been reduced from 35 per cent to 30 per cent.
Other reliefs are :
1. An individual with a dependant
spouse or at least two dependent children -
300,000 per annum (under the
marriage and children's relief).
2. A disabled person engaged in a
business or employment - 25 per cent deduction
from his assessable income
(disabled person's relief);
3. Any person of or above the age
of 60 years is entitled to 300,000 per annum
as relief from any business or
employment (under old age relief);
4. A relief of 240,000 cedis per
annum is granted any person sponsoring the
education of his child or ward in
any recognised registered education
institution (children's education
relief) limited to three children;
5. An individual is allowed a
relief of 500,000 cedis in respect of cost of training, which updates or improves
his professional, technical or vocational skills (training cost relief).
Mr Osafo-Maafo said all the
reliefs would now be enjoyed up-front through the information provided by the
worker's employer unlike in the past where they are paid after filing tax returns.
Mr Osafo-Maafo said meanwhile, the
rate of withholding tax has been increased from five per cent to 7.5 per cent.
The corporate tax rates on the
other hand have been reduced from 35 per cent to 30 per cent for companies
listed on the Ghana Stock Exchange with reference to the new tax law.
Corporate tax rate for unlisted
companies is now pegged at 32.5 per cent.
Mr Osafo-Maafo stated that the
Internal Revenue Service and the new national tax audit team to be formed would
enforce the rent law. This would ensure the payment of rent income by
landlords.
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Government to assist cocoa farmers to
increase yield
Accra (Greater Accra) 10 March 2001
Mr Yaw Osafo-Marfo, Finance Minister, on Friday said that, to sustain the cocoa industry, government intends to increase production yield per hectare by assisting farmers to rehabilitate and replant old, abandoned and destroyed farms.
The government will also improve the quality control system, input supplies and improve the internal and external marketing of cocoa through competition and equal access to the Ghana Cocoa Board' (COCOBOD) warehousing and crop financing facilities.
Mr Osafo-Marfo was delivering the first budget statement of the new government to Parliament in Accra.
He announced that an amount of 8.1 billion cedis has been earmarked by the government to rehabilitate selected roads on the primary routes for the evacuation of cocoa.
He also said government intends to raise the farmers' share of cocoa export prices to 65 per cent.
According to the minister, it has become necessary to compensate cocoa farmers for the loss in revenue following a review of the projection of key variables used in the determination of producer price and other rates for the 2000/2001 main crop season.
"With the payment of this compensation, the cocoa farmer's share of the f.o.b. price is restored to 67 per cent. Consequently, government has decided to pay cocoa farmers a total of 80.38 billion cedis, which translates to an additional 12,406.25 per bag (198,500,00 per tonne) for all purchases made last season."
The Minister added that government will undertake a national mass spraying of all cocoa farms before the next main crop season to generate employment in the rural areas and improve the husbandry of cocoa farms.
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External debts
set to rise, but domestic debts to come down
Accra (Greater Accra) 10 March
2001
The Minister of Finance, Mr Yaw
Osafo-Maafo, said on Friday the country's external debt of 31.7 trillion cedis
is expected to increase to about 34.1 trillion cedis (about 6.2 billion
dollars) due to more borrowing for debt repayment, creating a net inflow of 402
million dollars.
In his 2001 budget statement
presented to Parliament, he said the domestic debt of 9.4 trillion cedis at
December 2000 is projected to fall to 6.6 trillion by the end of the year 2001,
representing a fall of 2.8 trillion cedis.
"As government restores
fiscal discipline and improves on revenue collection, borrowing domestically to
finance expenditure will be markedly reduced when long dated bills borrowing
will become the norm."
The Finance Minister, who is also
the MP of Akim Oda, said a number of options would be used to ease the debt
burden.
These include negotiations for
debt relief, debt conversion programmes, debt swaps, more concessional
borrowing, the use of privatisation proceeds to retire some outstanding debts
and restructuring options with banks and other institutions.
The minister said monetary
stability would seek to attain a monetary growth rate of 32 per cent this year.
He said the central bank would
maintain a "tight monetary policy stance".
"The bank of Ghana will
continue to enforce prudential regulations to ensure the soundness of the
financial system towards the development of the economy."
Mr Osafo-Maafo said currently,
there are a number of laws before parliament aimed at facilitating financial
transactions, strengthening and deepening the financial system in general and
the Bank of Ghana in particular.
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2000 growth rates
were below target - Osafo-Maafo
Accra (Greater Accra) 10 March
2001
Provisional estimates of Ghana's
Gross Domestic Product (GDP) for last year indicate a growth rate of 3.7 per
cent, which is 1.3 percentage points below the targeted growth rate of five per
cent.
According to Mr Yaw Osafo-Maafo,
Minister of Finance, the growth rate was 0.7 percentage points lower than the
performance achieved in the previous year.
Presenting the 2001 budget in
Accra on Friday, he said the services sector performed strongly at 5.4 per cent
during the year. It was followed by the industrial sector with a growth rate of
3.8 per cent while the agricultural sector recorded a less than expected growth
rate of 2.1 per cent as against the 3.9 per cent achieved in 1999.
Mr Osafo-Maafo said as in previous
years, the nation's economy continued to be dominated by the agricultural
sector in 2000, accounting for 36.0 per cent of total real GDP.
He said at 1.1 per cent, the
performance of the crops and livestock sub-sectors in the year 2000 was fairly
disappointing compared to the 4.7 per cent achieved in 1999.
The fishing sub-sector recorded a
decline in growth of 1.6 per cent in 2000 as compared with a growth rate of 1.0
per cent in 1999.
"It needs hardly be
emphasised that the fishing sector has for several years achieved very
disappointing results and will be targeted more vigorously for a reversal of
the dismal performances," Mr Osafo-Maafo said.
He said cocoa as well as forestry
and logging sub-sectors, however, recorded impressive growth rates of 6.2 per
cent and 11.1 per cent respectively last year.
The corresponding growth rates for
1999 for the two sectors were negative 0.5 per cent and 6.8 per cent
respectively.
Mr Osafo-Maafo said the industrial
sector grew slightly weaker at 3.8 per cent as against the 4.9 per cent chalked
in 1999, adding that all the four sub-sectors of mining and quarrying,
manufacturing, electricity and water and construction recorded lower growth
rates last year than in 1999.
Mr Osafo-Maafo said there was a
strong upsurge in inflationary pressures in 2000 compared with the price
development in 1999.
He said the end-of-period
inflation for the 12 months ending December 2000 rose from 13.8 per cent to
reach 40.5 per cent.
The rate of food price inflation
that characterised the last nine months of 1999 continued into the first seven
months of 2000 until August when the rate accelerated to 10.9 per cent, ending
the year at 24.3 per cent.
"In contrast to the
relatively low rate of food price inflation recorded in 2000, the rate of
non-food price inflation rose sharply from 20.8 in December 1999 to 54.2 per
cent by the end of 2000, an increase of 33.4 percentage points."
Mr Osafo-Maafo said the current
account balance, excluding official transfers, recorded a deficit of 605
million dollars compared with a deficit of 1,074 million dollars in 1999.
"The improvement in the
current account resulted from developments in the trade account as well as
larger inflows of private unrequited transfers which increased from 472 million
dollars to 495.7 million dollars in the year.
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Government to
publish energy policy
Accra (Greater Accra) 10 March
2001
Government will publish a coherent
Energy Policy this year to ensure continuous supply of electricity and also to
guarantee that investments in the sector are timely and strategically driven.
"Government recognises that
the ability to achieve its socio-economic objectives will depend upon the
continuous availability and usage of energy," the Minister of Finance, Mr
Yaw Osafo-Maafo, said on Friday when he presented the 2001 budget to
Parliament.
The Ministry of Energy was
allocated 206.53 billion cedis to undertake its programmes. Out of the amount,
186.59 billion cedis will come from donors.
An amount of 199.43 billion cedis
will be spent on national electrification while 3.83 billion cedis will be used
to promote energy efficiency and conservation.
The minister touched on the
importance of the West Africa Gas Pipeline Project to the country, saying
"the availability of this relatively cheap and clean source of energy in
Ghana will no doubt go a long way to reducing our crude oil import bill".
In this connection, the government
will facilitate collaborative effort with participating governments of Benin,
Togo and Nigeria to harmonise all fiscal, legal and environmental regimes to
move the project towards its realisation before the end of 2003.
Mr Osafo-Maafo said government
will support the Volta River Authority's (VRA) bid to arrange private support
to provide an additional 110 megawatts of power at the Takoradi Thermal Plant
Project to boost its total capacity to 660 megawatts.
To augment power generation capacity,
the minister said government will proceed with the Bui Dam project.
He added that during the year
2001, due diligence, including environmental impact studies, will be completed
in the year and agreements signed between the VRA and the consortium of developers
to make way for the construction of the plant.
"This project, when completed
by 2006, will establish a firm supply balance between thermal and hydro
generation in the country."
He reiterated government's
commitment to the promotion of both national and rural electrification
programmes, saying that to ensure sustainability, emphasis will be on
productive uses of electricity.
On petroleum, the minister said
arrangements are underway for the supply of crude oil and finished products to
the Tema Oil Refinery.
He expressed the hope that, with
full ex-refinery cost recovery and the publication of a formula to constantly
adjust ex-refinery cost and ex-pump prices, a proper environment is in place
for a continuous availability of petroleum products.
Mr Osafo-Maafo said the
distribution arrangement for petroleum products has been reviewed and the
intervention of the Bulk Oil Storage and Transport in the distribution chain
removed.
"The new arrangement, which
requires direct relationship between the refinery and the oil marketing
companies, should not only enhance efficiency but also cut down on cost."
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Government to
resolve and minimise land disputes
Accra (Greater Accra) 10 March
2001
The Ministry of Lands, Forestry
and Mines will undertake a tenure reform and pursue alternative conflict
resolution mechanisms in order to resolve and minimise land disputes in the
country, Mr Yaw Osafo-Maafo, Minister of Finance, said on Friday.
Presenting this year's fiscal
budget to Parliament, the Minister said this would be done with the full
participation of traditional and customary landowners through
negotiations. He further said the
Ministry would, in line with that, pursue legislative reforms to review,
update, harmonise and consolidate all existing laws and policies on land,
forestry, wildlife and minerals to make them more relevant and applicable to
current and future needs.
"New legislation will be enacted
to require stool, skin, clan, family, and other landowners to survey and
demarcate boundaries of their lands with the approval of the Survey
Department," Mr. Osafo-Maafo said.
He said the government has
allocated 123.04 billion cedis to the ministry to enable it to implement its
programmes for 2001.
The Minister said in order to
balance the economy's over-reliance on precious minerals, promotion would be
given to the production of industrial minerals and value addition be
encouraged.
According to him, the
participatory resource management initiative would be further strengthened to
increase the involvement of landowners and fringe communities bordering the
resources in decisions that affect their interest.
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Education gets
highest allocation
Accra (Greater Accra) 10 March
2001
The government will spend 1,420.22
trillion cedis to the educational sector for the 2001 fiscal year. This is the
highest allocation compared to all sector ministries in the 2001 budget, Mr Yaw
Osafo-Maafo, Minister of Finance, announced on Friday when he presented the
2001 budget to parliament.
He said 6.41 billion cedis has
been provided to support girl-child education programmes in primary schools
while an additional 413.8 million cedis has been provided for the conduct of
science, technology and mathematics programmes for those at the senior
secondary school level.
He said in order to bridge the gap
of enhancement in education between rural and urban, programmes such as
provision of incentives to teachers, in-service training for teachers,
curriculum review and development and financial support for proven needy basic
schoolgirls would be undertaken.
Mr Osafo-Maafo said to achieve
quality teaching and learning under the FCUBE programme, a new concept known as
Whole School Development (WSD) has been designed which will expose teachers to
current methodologies and skills. Some 20,000 basic education teachers will
benefit this year.
He said government would focus on
the provision of infrastructural facilities in schools, especially in rural
areas, expanding existing ones, providing housing for teachers and procuring
classroom furniture.
The Finance Minister announced
that a total of four billion cedis has been provided for the completion of 20
Vocational and Technical Resource Centres and provision of modern equipment and
plant facilities for them to improve the skills of students.
At the tertiary level, major
rehabilitation and earmarked construction works will continue in a bid to
expand the facilities, especially at the University of Ghana (Chemistry block),
construction of lecture halls at University of Cape Coast and improvement in
the water systems at the University for Development Studies.
Others include the construction
and rehabilitation works on lecture theatres for engineering, pharmacy and
Institute for Mining and Mineral Engineering at the Kwame Nkrumah University of
Science and Technology, while polytechnics at Wa and Bolgatanga will be
expanded to admit more students.
Mr Osafo-Maafo said the Education
Trust Fund would be used to provide support for development and maintenance of
essential academic facilities and infrastructure and supplement funding for
grants of scholarships to gifted but needy students.
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