Finance Minister Ken Ofori-Atta has provided a set of revenue and expenditure measures contained in the 2024 budget statement that he presented to Parliament on Wednesday, November 15.
Regarding the Revenue Measures, he said, “Notwithstanding the efforts made by the Government so far, there still exists a significant VAT gap that needs to be urgently addressed to improve revenue performance. In this respect, the following measures will be put in place: i. the Commissioner-General’s certified invoice will be the basis for all deductible expenses for income tax purposes;
ii. the second phase of the electronic invoicing system (e-VAT) covering six hundred large taxpayers and more than two thousand small and medium taxpayers will be implemented;
iii. the implementation of the upfront VAT on imports of Vatable goods by unregistered importers will continue;
iv. A VAT flat rate of 5 percent will replace the 15 percent standard VAT rate on all commercial properties will be introduced to simplify administration and enhance revenue mobilisation; and v. some VAT exemptions will also be reviewed to reduce distortions and
abuses in the system.”
On the Expenditure Measures, the Finance Minister said “the following key expenditure measures will be pursued in line with the IMF supported programme to support the Government’s fiscal consolidation process:
“Amendment of the Fiscal Responsibility Act to enhance budget credibility, underpin lasting fiscal discipline and improve Fiscal Policy oversight. Develop a centralised inventory of all ongoing and planned public investment projects to strengthen budget credibility, exercise commitment control, and prevent the accumulation of spending arrears. The inventory will include information on: Nature and age profile of all ongoing projects including project start, completion dates, and estimate of project completion (%); ➢ Source of financing (domestic vs external);
Financing resources spent to date and additional financing required;
List of priority projects planned and ongoing projects and the required multi-year budget allocation (showing annual funding requirement); and List of non-priority projects and their proposed treatment (suspend them temporarily or permanently), Enable ‘Blanket Purchase Agreement’ to fully capture multi-year commitments / contracts in Ghana Integrated Financial Management Information System (GIFMIS), in line with the Medium-Term Expenditure Framework (MTEF) ceilings to strengthen spending controls and prevent accumulation of arrears.
“Integrate Human Resource Management Information System (HRMIS) with GIFMIS and the Payroll system to strengthen control on ‘ghost names’, promotions, hiring and payroll costs. Align the quarterly allotments with a cash forecast and tighten the use of allotments as a control on the GIFMIS rather than the budget (starting from Q1- 2024). Implement Government’s strategy to streamline earmarked funds to improve operational efficiency of each to ensure value for money and reduce budget rigidities.”
The Finance Minister further said that the Akufo-Addo administration was determined to maintain discipline in order to keep the economy stable.
He said the government had turned the corner relative to the economic challenges when it successfully completed the first review of the 3-year 3 billion International Monetary Fund External Credit Facility (IMF-ECF) programme.
“We turned the corner when we completed the IMF first review,” he told Parliament.
He further assured that the government is poised to “maintain stability and keep growing. and ensure increased growth, currency stability”
“We turned the corner when inflation started declining from 54 1 in December to 35.2 in October 2023, he added.
“The recovery is indeed real and is here to stay,” he further assured.
Mr Ofori-Atta further stated that the prompt deployment of strong fiscal and monetary policy measures since the last year as well as in the first half of 2023 largely accounts for the continued economic recovery that is being experienced.
“So far, growth in 2023 has been more resilient than expected, inflation has declined in line with the fundamentals, the fiscal and external balances have improved, and the exchange rate has stabilised,” he said.