The Member of Parliament for Suman in the Western North Region, Hon Joseph Betino has said the 2022 Budget and Economic Statement failed to address the critical needs of Ghanaians.
According to him, the budget was not responsive to the concerns that have bedevilled the Ghanaian economy into a serious crisis, causing citizens to bear the brunt of economic mismanagement.
Hon Benito was reacting to the 2022 Budget Statement and Economic Policy presented to Parliament by the Minister for Finance, Ken Ofori Atta on Wednesday, November 17, 2021.
He said it was the expectation that the government will announce policies to unbearable hardships facing most Ghanaians, pointing that those hardships stemmed directly from the high cost of living, constant increases in the prices of basic items, fuel price increases and excessive taxation by the government.
He named the taxes that had been levied on Ghanaians since 2017 as the five per cent increase in VAT, the introduction of the luxury tax levy and three per cent VAT flat rate, sanitation tax, the five per cent national fiscal stabilization levy, which should have expired in December 2017 but was extended indefinitely, making it a new tax.
Besides, he said, the government introduced a two per cent component of a special import levy, increased the energy sector levy by 30 per cent and extended it for another 15 per cent for another year, increased the communication tax by 50 per cent, imposed the financial sector levy of five per cent on all banks, the price stabilization and recovery levy on fuel by 40 per cent, among others.
“In a desperate bid to plug these holes, the Akufo Addo/Bawumia-led government has sought to impose more suffering and pain on the ordinary Ghanaian by punishing them with additional taxes and other fiscal measures in the budget aimed at raising additional tax stock,” Hon Betino added.
The Suman MP said the 1.75 per cent electronic transaction levy that would be imposed on Ghanaians in 2022, would affect mobile money transactions, bank transfers and inflows in remittances.
The overall effect, he added is poverty and increasing youth unemployment which government must tackle with seriousness.
“What this government seeks to do is that from January 2022, every single remittance from anybody living in any part of the country to his or her relatives will attract tax, and this is not acceptable. As MP my constituents ask for help every day to pay hospital bills and funerals, so you can imagine how it will affect the ordinary Ghanaian,” he lamented.
Hon Betino said he was disappointed with the fact that it was his expectation that the terrible state of the economy would compel the government to propose policies in the budget that addressed unsustainable debt, hardships, the high cost of living, fiscal indiscipline, arrears clearance, unemployment and the misuse of public funds.
He said Ghanaians were now left entirely to their fate and had to brace themselves for even more severe hardships going into Christmas and the New Year, as the budget did not respond to the most important issues affecting them.
The unemployment is expected to rise, our debt-to-GDP is also expected to rise; debt levels are also expected to rise and we expect that investor confidence will continue to be eroded. In this circumstance, it is obvious that a review budget will be required to correct the serious imbalances and the distortions that this budget will create.
The MP also expressed disappointment in the fact that the budget failed to give hope in the road sector as many rural feeder roads remained in bad condition.
He said the cessation of the road tolls would affect the sector but questioned why persons whose roads are bad would be made to pay for tolls.
In his considered view, removing the toll booth and charging the fees at the point of vehicle registration or renewal of roadworthy is not the best as Tolls are collected on first-class roads.
Presenting the budget, Mr Ofori-Atta today Wednesday, 17 November 2021 explained that the upsurge in the use of e-payment platforms as a result of the COVID-19 pandemic has been an impetus for the introduction of the levy.
As a result, Ghana recorded a total of GHS500 billion from e-transactions in 2020 compared with GHS78 billion in 2016.
He said: “It is becoming clear there exists an enormous potential to increase tax revenues by bringing into the tax bracket, transactions that could be best defined as being undertaken in the informal economy.”
He noted, therefore, that the government is charging an applicable rate of 1.75% on all electronic transactions covering mobile money payments, bank transfers, merchant payments and inward remittances, which shall be borne by the sender except inward remittances, which will be borne by the recipient.
“Mr Speaker, to safeguard efforts being made to enhance financial inclusion and protect the vulnerable, all transactions that add up to GHS100 or less per day, which is approximately GHS3,000 per month, will be exempt from this levy,” he stated.
He said E-Levy proceeds will be used to support entrepreneurship, youth employment, cyber security, and digital and road infrastructure, among others.
“Mr Speaker, this new policy also comes into effect once appropriation is passed from 1st January 2022. The government will work with all industry partners to ensure that their systems and payment platforms are configured to implement the policy,” he said.
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