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The recently approved COVID-19 health rate, which will see the VAT fixed rate and the national health insurance rate adjusted upward, will not be used to pay for the free water and electricity that were delivered to the public last year.
This is according to a statement issued by the Ministry of Finance.
The Ministry says the claims perceived by the public are inaccurate.
Information Minister Kojo Oppong Nkrumah had previously indicated that the new taxes proposed by the government would help address the huge tax gap created as a result of the government’s COVID-19 spending.
He said the government spent around GH ¢ 19 billion of borrowed funds to provide free water and electricity, among other expenses, to combat the COVID-19 pandemic and that amount must be repaid.
But the Ministry of Finance in its statement clarified what is the hinted minister .
“The Ministry also took note of media reports suggesting that the government has announced that the COVID-19 tax will be used to pay for 2020 free water and electricity. Again, this is incorrect. The Information Minister’s comment that COVID-19 expenditures include water and electricity should not be misinterpreted to mean that the new 2021 taxes are a direct charge for those services, ”the statement said.
In a related development, the Ministry also denied media reports suggesting that the government has so far spent 1.7 billion GHS on the COVID-19 pandemic.
Media reports had suggested that although GHS 2.5 billion was approved for the 2021 budget on the Coronavirus Relief Program (CAP) to support households, help healthcare workers, soft loans for micro, small and medium-sized enterprises, only 1.7 billion GHS were used.
However, the Ministry rejected this claim in a statement.
He explained that said GHS 1.7 million highlights expenses in just two items under COVID-19 related programs.
“The Ministry informs the general public that these publications are incorrect. The 1.7 billion GH reflects spending on just two elements of COVID-19-related spending, namely, COVID-19 Relief Program 1 (CAP1) and Emergency Preparedness and Response Plan 1. Other COVID-19 expenses were the COVID-19 Relief Program 2 (CAP2), COVID-19 Preparedness Plan 2, Provision of Health Infrastructure, Capitalization of the Development Bank Seed Fund, among others ”.
Yapei-Kusawgu Member of Parliament (MP) John Abdulai Jinapor has also taken on the government for setting the fiscal impact of COVID-19 spending at GHS19 billion.
The legislator says the claim is false.
In a statement to raise the alarm, Jinapor said that although the amount was the budgeted figure, only 1.7 billion GHS was used according to the government’s budget statement for 2021 presented to Parliament.
John Jinapor also mentioned that it is even difficult to understand why the government will claim to have spent a lot to manage the health crisis and attribute the current economic challenges to the pandemic.
Below is the statement from the Ministry of Finance.
—Citinewsroom
