Gov’t Ropes In Professionals In Informal Sector

By Liberty Amewode
Contribution to the overall income tax revenue of the country by professionals in the informal sector has been very low compared to other income tax payers.
Consequently, the government has decided, beginning next year, to focus attention on the revenue contribution from the self-employed group, with special emphasis on professionals and will therefore establish a special desk in the Domestic Tax Division of the Ghana Revenue Authority (GRA) to monitor compliance of professionals to their tax obligations.
According to the Minister for Finance and Economic Planning, Dr Kwabena Duffour, who announced this in the 2011 budget statement presented to Parliament last week Thursday, November 18, 2010 the country has many self-employed professionals, such as accountants, engineers, pharmacists, medical doctors, lawyers, bankers, insurers, among others earning more than average income.
He said many of these professionals, educated with the taxpayer’s money, continue to depend on the complementary resources of the state to operate their businesses.
“Unfortunately, their contributions to overall income tax revenue has been very low (around five per cent) compared to other income tax payers”, he stated.
On pensions, Dr. Duffour said following the implementation of the new pension scheme this year, provision has been made in the third-tier voluntary personal pension scheme to cater for the peculiar needs of workers in the informal sector who are about 85 per cent of the working population.
“Informal sector contributors will have two accounts, a retirement account (to provide benefits on retirement) and a personal savings account with rules for withdrawals before retirement”, he stated.
What this means, he added, is that workers in the informal sector can now participate in a pension scheme which will take care of them in their old age and just like counterparts in the formal sector, will also receive monthly pensions as well as a lump sum.
The minister also stated government’s consideration of the monetization of all or portion of its gold interests to take advantage of the current increases in gold prices, increased demand for gold exposure by investors, and the appreciation in the equity interests in the gold mining companies.
He said beginning in 2011 fiscal year therefore, government will commence discussions on the establishment of a national vehicle, the Ghana Gold Company (GGC), which will hold the country’s gold royalties and equity interest.
On the issue of disability, the minister said the share of the Common Fund for person with disability is to be increased from the current 2 per cent to 3 per cent in line with the social democratic tenets of the NDC of supporting the disadvantaged.
He called on District Assemblies to ensure speedy releases of the funds to support the programme of persons with disability.
On electricity, Dr. Duffour hinted at moves to subject tariffs to quarterly reviews to ensure continued cost recovery.
However, he added, government will continue to make provision in the Budget to provide subsidies to support life-line consumers of electricity.
Touching on measures to support poultry farmers to increase local production of chicken and eggs, the minister said a significant portion of the Japanese grant and other grants will be made available to poultry farmers to be used to acquire the necessary equipment and chemicals for the industry.
He said government intended to boost commercial agriculture by engaging
the private sector through the Public Private Partnership framework in agro processing, adding that proposals from private sector organizations in developing large scale commercial farms in rice, maize and soya bean cultivation and processing, among others, will be considered.
According to him, large feed processing mills will be established as part of the agro processing to feed the poultry industry, thereby contributing to the millennium development goal of required healthy levels of animal protein consumption by the year 2015.
The minister said the 2011 budget puts Ghana on the right path to achieving accelerated economic growth and prosperity in an environment of stability with significant resources being deployed to modernize agriculture, boost manufacturing, provide critical infrastructure, improve the delivery of water, sanitation and electricity services, support the private sector to grow and become more competitive, and develop our human resource capability.
The budget, he stressed, also seeks to grow the Ghanaian economy on a sustainable basis and create jobs to reduce unemployment.