Ghanaians might just have to get used to the worsening economic situating they find themselves as there seems to be no rescue plan in sight from government.
Contrary to recent promises by the Finance Minister, Dr. Kwabena Duffuor that his 2010 budget to be read on Wednesday 18th November, 2009 holds a lot of ‘goodies’, Ghanaians are going to be further burdened with more and increased taxes.
Dr. Duffuor who earlier this year announced a 5% reduction in petroleum in petroleum taxes which is costing the state about US$50million supposedly in line with the NDC’s campaign promises is set to re-introduce even more taxes in frantic struggle to fill large financing gaps in the forth coming budget.
It’s clear that government’s decision to slash the petroleum taxes for political reasons is proving unwise. Not only is government planning to increase taxes on petroleum from next year, it also plans to reverse some of the tax waivers on food imports that the Kufuor government gave during the global food crises.
Dr. Duffuor is also likely to announce increments in VAT as well as reduce the number of zero rated VAT goods and services; another of the several conditions imposed by the IMF. The situation is expected to be further worsened by reductions in government’s expected inflows due to its inability to implement on time some of the conditions it signed up to, in its agreement with the World Bank and IMF.
A condition to submit to parliament, a bill on the right to information bill, in September this year, was set by the IMF before government would access an amount of US$150million which It has failed to do. In yet another condition agreed to with the IMF, Government is also expected to remove subsidies on water and electricity before the end of 2009.
The government which had relied so much on the expected inflows due to its new relationship and agreement with the world Bank and IMF has found itself in a situation where it is not going to be able to finance government’s activities and hence is resorting to increase and introudce more taxes contrary to the promises by President Atta Mills not to increase and introduce any new tax.
Source: The Daily Searchlight/ghana
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