Talk Tax Passed
PARLIAMENT yesterday unanimously approved the financial policy of government for the fiscal year ending December 31, 2008.
The motion, which was moved on Thursday, November 15 by Finance and Economic Planning Minister, Kwadwo Baah-Wiredu, generated heated national debate as some portions did not go down well with sections of the population.
The most contentious aspect of the budget was government's intention to impose a new type of airtime levy on the telecommunication industry.
The most vociferous debate against the proposed levy emanated from the minority National Democratic Congress (NDC) in Parliament, whose leader, Alban Bagbin described the new levy as “Talk Tax”, which was an inhibition to freedom of speech.
The Deputy Minority Leader and Member of Parliament (MP) for Avenor Ave, Edward Doe-Adjaho said the NDC would reverse the new levy as soon as it came back to power.
Several Ghanaians condemned the new levy through the media and mobile service operators, similarly, protested at a press conference in Accra on Tuesday.
They argued that a recent survey by the World Bank revealed that the proposed tax had negative implications, as it was counterproductive and would ultimately erode the economic gains made in the last seven years.
In a related development, Parliament approved a loan facility agreement between the Government of Ghana and KfW of Germany for an amount of Ten Million Euros (€10,000,000.00).
The paper for the loan was laid before the House by the Deputy Minister of Finance and Economic Planning, Prof George Gyan Baffour on Friday, November 23, 2007 and referred by the Speaker to the Finance Committee so it would consider it and report back to the House.
To consider the agreement, the Committee met with the Minister of State at the Ministry of Finance and Economic Planning, Dr. Anthony Akoto Osei and officials from the Ministry of Finance and Economic Planning.
The €10 million loan agreement has the following terms and conditions: Repayment Period of 30 years, grace period of 10 years, a 40-year maturity period, an interest rate of 0.75 per cent, a commitment fee of 0.25 per cent and a 68.80 per cent grant element.
The Committee observed that the Multi Donor Budget Support (MDBS) programme sought to support the implementation of the Ghana Poverty Reduction Strategy (GPRS II).
The MDBS programme is co-financed by seven bilateral development partners: Canada, Denmark, France, Germany, the Netherlands, Switzerland and United Kingdom.
Hon. Akoto Osei informed the Committee that the loan was the last of the "programme loans" contained in the 2007 Budget and Economic Policy Statement which was approved by the House in December 2006, and that the proceeds of the loan would be used to support the implementation of the 2007 budget.
The Committee explained that the loan had delayed because the German Government needed to get approval from their Parliament, adding that the commitment and interest charges would be repaid semi-annually in arrears on 30th June and 30th December each year, commencing on 30th December, 2017.
According to the Committee Chairman, Nii Adu Daku Mante, who presented the report to the House, “the Committee carefully considered the agreement and found that its approval would be necessary to help support the 2007 budget.
“The Committee therefore recommends to the House to adopt this report and approve by resolution, the Loan Agreement between The Government of Ghana and KfW Frankfurt am Main for an amount of Ten Million Euros (€10,000,00.00) for Multi Donor Budget Support IV in accordance with the Constitution, the Standing Orders and Section 7 of the Loans Act, 1970 (Act 337).”
By Sylvanus Nana Kumi & Ethel Kangberee