Ghana Cedis AS PART of efforts to mobilize enough revenue domestically, government will from next month begin implementing the Treasury Single Account (TSA) at the Bank of Ghana to ensure an efficient cash management system.
The TSA is an account expected to ensure an efficient flow of public sector funds.
According to Kwabena Adjei-Mensah, Director of Budgets, Ministry of Finance and Economic Planning, the project when implemented, will save the economy some GH¢116 million.
Giving an overview of this year's budget at a workshop for the Parliamentary Press Corps and financial reporters, Mr. Adjei-Mensah said government will pursue prudence in its fiscal management in order to help reduce the high fiscal deficit of 14.8 percent recorded in 2008.
The government this year intends to reduce spending in state protocol drastically, strengthen public financial management and enhance domestic revenue mobilization, he explained.
On resource mobilization for this year, the total receipts for the fiscal year was projected at GH¢9.79 billion. Out of this, GH¢5 billion, representing 60.6 percent of the total amount would come from domestic revenue mobilization whilst GH¢1.3 billion, representing 13.3 percent would be gotten from grants and GH¢1.02 billion from loans.
From this, GH¢4 billion, representing 43.4 percent would be used to pay salaries of over 400,000 public sector workers whilst GH¢2.53 billion, representing 25.9 percent of the amount would be used to cater for personal emoluments.
The Director of Budgets noted that for Ghana to wean itself off donor support, it needs to improve its revenue mobilization by an additional 40 percent.
Importantly, domestic revenue consisting of tax and non-tax revenue is projected at GH¢5.93 billion, a 23.6 percent increase over the outturn for 2008. Total tax revenue from the Internal Revenue Services, VAT Service and CEPS is projected at GH¢5.11 billion, representing 23.9 percent of Gross Domestic Product (GDP).
International trade taxes, comprising import and export duties are also projected at GH¢922.5 million, representing 4.3 percent of GDP.
Government as part of efforts to boost revenue mobilization has increased the Airport Tax as well as the Communication Service Tax which will require parliamentary approval.
Oku Afari, Director, Policy Analysis and Research Division on his part explained that the high fiscal deficit coupled with the balance of payment deficit requires efficient and prudent financial and economic management to ensure sustenance in macroeconomic indicators.
The general economic policy direction for this year is directed towards correcting the large fiscal imbalance experienced since 2006, rationalizing subsidies to state-owned enterprises, particularly in the energy sector as well as ensuring adequate international reserves.
By Charles Nixon Yeboah