TUC speaks on the 2000 Budget Statement

Accra, Feb. 24, GNA - The Trades Union Congress (TUC) has called on parliament to reject the proposed increase in the rate of the Value Added Tax (VAT).

The TUC also urged parliament to ask government to ensure that a considerable number of income earners outside the tax net are brought in to ease the burden on workers who are incapable of containing any further tax increase.

This is contained in a submission to Parliament on the TUC's comments on the Budget statement for the 2000 financial year which was copied to the media. "In other words, we are suggesting that the inefficiencies in the collection of taxes should be reduced if not completely eliminated".

It said the government would demonstrate its commitment to the alleviation of poverty by reducing the tax on the people. The labour body called on civil society organisations to join in protecting the interest of the ordinary people by resisting the proposed increase in the VAT rate.

The TUC noted that it was concerned about the continued instability of the Cedi and the raising of the interest rate. "We are expecting the government's economic policy statement for 2000 to grant more autonomy to the Bank of Ghana to enable it deal with the unstable macroeconomic situation on a more sustainable basis".

The TUC said in the 1999 budget statement to parliament, the government promised but failed to place before the house the new Bank of Ghana Bill that was going to strengthen the independence of the central bank. It therefore appealed to parliament to revisit the issue in its deliberation on the 2000 economic policy statement.

The TUC said even though it lauds government support for the private sector through the buy-made-in-Ghana goods campaign, it believes that what is crucial for growth is a stable macroeconomic environment with low inflation and interest rate, a stable currency and lower corporate taxes.

"There must also be a degree of protection for our local industries. "These can be achieved if government sets its priorities right, controls its expenditure by reducing or eliminating waste and corruption and reduce competition with the private sector in the credit market".

The TUC asked government to stop paying lip service to the development of agriculture, saying the withdrawal of subsidies has crippled the effort of poor farmers whose untiring efforts have sustained the economy over the years. It asked government to review the 10.3 million dollars allocated to irrigation schemes throughout the country since it is "ridiculously low".

The TUC further asked government to pay more attention to the Agricultural Services Sector Investment Project as announced in this year's budget. The statement said after several years of implementation of economic reforms, the TUC was expecting a budget statement that that would create the macroeconomic environment that is conducive for the rapid growth of the private sector which will in turn create the environment for rapid socio-economic development.

"We regret to state that we do not find many of such policies in this year's government economic policy statement". It however, said it found some positive developments in the review of the economic performance last year and the policy initiatives planned for the medium term 2000 to 2002.