Govt can fix economy without hike in taxes – Dr Akoto Osei

Former Minister of Finance, Dr. Anthony Akoto Osei claims new array of taxes outlined by the government will fetch a mere GH¢300 million but State Owned Enterprises (SOEs) alone have mismanaged GH¢1.69 billion according to the Auditor-General's report.

Discussing the economy on Joy FM's Newsfile, Dr. Akoto Osei who is also Member of Parliament for Old Tafo constituency in the Ashanti Region reasoned that, the culture of government “borrowing to live” and massive over-expenditure, were the bedrock of a troubled economy.

He catalogued the over-spending in Office of Government machinery from GH¢300m in 2009 to GH¢4.8bn in 2012. He says the Auditor –General, reports that in 2011, financial irregularities in Corporations amount to GH¢1.69bn.

Government through the Finance Minister Seth Terkper has also announced that it is set to introduce new taxes intended to raise GH¢371 million in domestic revenue, to enable government deal with economic challenges.

The Communication Service Tax amendment bill is one of these tax proposals passed by Parliament. Stabilization Levy, the Import Fees, Excise Duties, on items like Cutlasses, Condoms and Outboard Motors are also to be taxed.

But Dr. Anthony Akoto Osei suggests that in view of serious mismanagement within the SOEs, chasing over GH¢300m in taxes misses the point about the nature of the country’s problems.

Fifi Kwetey responds

Minister of State in charge of Allied and Financial Institutions, Fifi Kwetey disputes the charge that government was borrowing to live.

He said loans procured by government were for infrastructures that have the potential to transform the economy. He mentioned the over $273 million loan contracted for the Kpong Water Supply Expansion Project.

According to the website of the Ghana Water Company, the scope of works for the project includes construction of a new 353,000 m3 per day and construction of new transmission mains through Dodowa, Adenta to Accra Booster station.

The minister also suggested that the Tema Oil Refinery (TOR) is now free from the huge debt burden it was once carrying on its shoulders, as the Government of Ghana has finally paid the remaining GH¢572 million debt owed the Ghana Commercial Bank (GCB).

He says it used to be “fanciful” in the past for opposition parties to “scare” people with debt incurred by ruling governments as a political strategy.

The outspoken minister claimed that Ghana’s economic transformation will take decades "if we are to depend on domestic taxes alone".