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Business News of Thursday, 15 November 2018

Source: Myjoyonline.com

2019 Budget: New taxes, increases will be unacceptable - Economics professor

An Economics professor at the University of Ghana says an increase in taxes will not be appropriate at this point in time for the country as the 2019 budget is presented Thursday.

Professor Peter Quartey of the Institute of Statistical, Social and Economic Research (ISSER) says government is rather better off broadening the tax base.

“We have a lot of taxes but we have not been efficient in collecting them…what measures are we putting in place to ensure that we collect them” he quizzed on Joy FM’s Newsnight show on Wednesday.

Already, the Minority is predicting that government will introduce new taxes.

These new taxes, according to the Minority Spokesperson on Finance, Cassiel Ato Forson, will be the Finance Ministry's solution to bridging the gaping fiscal deficit.

“We know that government will introduce some form of tax. Obviously, the tax will happen because of the fiscal gap,” he told Joy News.

He added that “Looking at the kind of expenditure that this government wants to heap on the economy and looking at the revenue - already the revenue is not doing well and the fact that they want to do a fiscal deficit not exceeding 5% - there is certainly a fiscal gap.”

But the renowned economist said, “new taxes and increases in taxes will not be acceptable at this point in time.”

Prof Quartey said the 2019 budget should restore hope in the citizenry as the country goes through harsh economic times.

“I believe this is the time...the first two years is for stability and ensuring that we clean up the mess that was created during the elections. Having done that, I believe this is the opportunity to actually provide hope for Ghanaians,” he said.

According to him, he is anxious to see the budget to know how government is going to stimulate the private sector.

He said he expects to know how the cost of doing business is doing in the country, in terms of the cost of utilities, getting credit facilities and the foreign exchange rate.

“Then I expect to see infrastructural development. We have heard several times that they [government] want to mortgage the GETFund resources so they can construct a lot of classroom blocks and provide the needed infrastructure…I expect to see some roads constructed,” he stated.

Prof Quartey also expects to see how government’s flagship programmes including One District One Factory, Planting for Food and Jobs and the others are doing since much has not been seen in that regard.

“I am hopeful that this budget would present some new figures, initiatives and new activities that would stimulate the aforementioned programmes.

“Because when this is done and is done properly, it would minimize the exchange rate fluctuations, create more jobs and that for me is important,” he said.

Regarding the Free Senior High School programme, Prof Quartey believes the country needs a sustainable funding mechanism.

“At the moment, the programme is not sustainable, as it is not getting adequate funding and the approach for me needs to be relooked. It is a good policy but the implementation has some challenges,” he said.

He said parents can contribute towards the funding of the programme.

According to him, the programme will be better off if government pays for the fees and the parents take care of the boarding fees and other expenses.

“Alternatively government can look at providing funding for less endowed schools where you get it free and the endowed ones will have parents paying,” he said.