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Business news for Monday, March 15, 2021
Source: 3 News
03/15/2021
Nana Addo Dankwa Akufo-Addo, President of Ghana
The Ghanaian government has been told to account for the disbursement made to the country by the International Monetary Fund (IMF) to deal with the effect of the coronavirus before introducing new taxes.
On April 13, 2020, the IMF Executive Board approved the disbursement of one billion dollars to be used under the Rapid Credit Facility after the Bretton Woods institution said that the COVID-19 pandemic was already there. seriously affecting Ghana.
The IMF further noted that growth was slowing, financial conditions had tightened and the exchange rate was under pressure.
“The authorities have responded in a timely and proactive manner to contain the spread of the COVID-19 pandemic in Ghana and support affected households and businesses.
“The Executive Board of the International Monetary Fund (IMF) approved today the disbursement of SDR 738 million (approximately US $ 1 billion) to be used under the Rapid Credit Facility (RCF). The disbursement will help address the urgent fiscal and balance of payments needs facing Ghana, enhance confidence and catalyze support from other development partners.
“The COVID-19 pandemic is already seriously affecting Ghana. Growth is slowing, financial conditions have tightened, and the exchange rate is under pressure. This has resulted in large needs for government and external funding. Authorities have responded in a timely and proactive manner to contain the spread of the COVID-19 pandemic in Ghana and support affected households and businesses.
“The IMF continues to closely monitor the situation in Ghana and stands ready to provide policy advice and further support as needed,” the IMF said.
“The response of the authorities has been timely, focused and proactive, focused on increasing social and health spending to support affected households and companies. Recently, the Central Bank has taken steps to ensure adequate liquidity, preserve financial stability, and mitigate the economic impact of the pandemic, while allowing exchange rate flexibility to preserve foreign reserves.
“The uncertain dynamics of the pandemic create significant risks for the macroeconomic outlook. Ghana continues to be classified as having a high risk of debt distress. The authorities remain committed to policies consistent with strong growth, rapid poverty reduction and macroeconomic stability in the medium term, ”he added.
Despite this support provided to the country, the government proposes in the 2021 budget statement the introduction of a Covid-19 Health Levy of an increase of one percentage point in the National Health Insurance Levy and an increase of one percentage point in the VAT Flat Fee to support expenses related to Covid-19.
“To provide the resources necessary to address these challenges and fund these activities, the government is proposing the introduction of a Covid-19 Health Levy with a one percentage point increase in the National Health Insurance Levy and a one percentage point increase in the fixed rate of VAT. to support expenses related to Covid-19 ”, said the budget.
But the executive director of the Media Foundation for West Africa (MFWA) Sulemana Braimah has said in reaction to the new taxes that the government must first account for the funds it received from the IMF.
“COVID-19 tax? Consider this and many more loans and help first, ”he tweeted.
Furthermore, he noted that while other countries are granting Covid tax breaks to enable citizens to cope with the ravages of the coronavirus pandemic, Ghana is imposing a COVID-19 relief tax on its people.
In another tweet, Braimah said: “While other countries grant Covid tax breaks, Ghana imposes Covid tax breaks.”
He added: “Instead of reducing corruption, people are being taxed more and fighting those who are fighting to protect the public purse. Just a 10% reduction in corruption will be fine. “
The Member of Parliament for North Tongu, Samuel Okudzeto Ablakwa, has called on the government not to tax the people of this country in this difficult period of the coronavirus pandemic.
Ablakwa said: “Do not squeeze additional taxes from the people in these difficult times just to fund government propaganda as a flagship program.”
Meanwhile, Member of Parliament for Sekondi Andrew Egyapa Mercer has said that the new taxes introduced in the 2020 budget1 are aimed at solving specific problems.
He said the problems facing the country at the moment do not allow the government to borrow introduced taxes to address specific challenges.
His comments come after Tamale North legislator Alhasan Sayibu Suhuyini said that the 2021 budget statement presented by the leader of the government company Osei Kyei Mensah Bonsu will worsen the situation for businesses in the country.
He said that at a time when Ghanaians and businesses are grappling with the negative impact of the coronavirus, the government has introduced taxes to, in their view, make their plight worse.
“The government introduced heavy taxes to some companies that were already overburdened by COVID,” he said in Key Points on TV3 on Saturday, March 13.
He added “There is the sanitation tax that we are going to deal with. We also have to pay the Covid fee.
How much more can you be insensitive? As a people, we have already paid Covid for lost loved ones and businesses that have been lost. “
But Mercer said on the same show that “the taxes introduced are essentially aimed at solving specific problems,” he said.
