Senior Advisor to the Finance Minister, Dr. Samuel Ashong has said, according to the ministry’s projections the nation’s economy might get back to “some semblance of normalcy” in the next three years.
From his analysis, the impact of COVID-19 has not only been dire but continues to exert pressures that may collapse the economy if strong measures like the introduction and adjustment of taxes are not taken immediately.
According to him” “2020 was a year where the deficit was one of the highest. As a result of all the challenges that we have, the national debt with all the financial sector bailout and the Independent Power Producers energy payments it ballooned the deficit.”
He was emphatic that government, in its current state, cannot fund capital intensive projects and therefore innovative means are needed to get some essential infrastructure in the coming years. In the same vein, government is ensuring that measures put in place to rake in more revenue do not affect industries who are already battling with recovery strategies.
“There is little room in the budget for expensive projects. The growth trajectory of the economy has been brought down, we are in a lower trajectory part of growth and all the income-based taxes have been affected that is why in the budget most of the taxes are consumption-based because the industries are hurting,” he said.
Noting that this is not the time to tax consumers, he explained that with the freebies offered everyone in 2020 “we have to clean the house and make sure that this economy survives in the foreseeable future even as we revive the industries.
Government must function, and government functions only on revenues from taxation, levies and fees. So, in as much as it may not be good news for certain sectors of the economy, this is the reality.
Something has to give and unfortunately, if there are no businesses, there will be no employment, therefore we need to protect the businesses that is why we didn’t put a lot of taxes on production but on consumption so that businesses can be able to revive, employ people and get them working, earn income and contribute their quota to the coffers.”
Dr. Ashong was speaking at the Ghana National Chamber of Commerce and Industry (GNCCI) seminar on the national budget. This seminar was under the theme: ‘2021 National Budget: Prospects for Recovery, Resilience, and Competitiveness for Private Sector Growth.’
President of the GNCCI, Clement Osei-Amoako said that business reaction to the 2021 National Budget has been mixed on accounts of introduction of new taxes, upward revision of existing taxes, and COVID-19 support initiatives.
As a result, the seminar’s objective and was to allow experts and business operators to appreciate and interrogate government policies and programmes contained in the 2021 National Budget, as well as to explore inherent risk and business opportunities.