Finance Minister Ken Ofori-Atta has hinted that, among other policies, a key element of the 2020 budget to be presented in Parliament today Wednesday, will be reforms in the country’s tax structure.
Government boost private sector growth with the review of the current tax structure. S ome experts even predict that the 2020 budget will overhaul the entire structure.
With revenue mobilisation, a major headache for government, the review of the tax structure will seek to enable the Finance Ministry to meet its revenue targets.
For instance, total revenue and grants in the first half of the year amounted to GH¢22.77 billion, compared with a programmed target of GH¢26.96 billion, resulting in a shortfall of 15.5 per cent. Experts fear that it is likely that the annual target of GH¢58.8 billion will be missed.
The 2020 Budget will, therefore, review the whole tax structure to create the right environment that will enable players within the private sector to thrive and create the needed jobs for the mass of the people.
The budget, the fourth under President Nana Addo Dankwa Akufo-Addo since he assumed the reins of government on January 7, 2017, will seek to consolidate the gains made in the last three years.
The 2020 budget statement will also see the revision of the present tax exemptions regime, a regime which has cost the country about GH¢10 billion per annum on average in the last few years.
A significant review of the benchmark values policy which halved the base of taxation for importers is expected in today’s budget presentation. The move is premised on the fact that the policy is not yielding the needed results.
Domestic manufacturers have vehemently complained that the policy is counter-productive.
The budget is also expected to give an update on the revenue measures that were introduced in the 2019 Mid Year budget review.
They include a review of the Energy Sector Levies Act, 2015 (Act 899) to consolidate all the revenue legislation relating to the energy sector into one law and the planned upward adjustment in the Road Fund Levy, the Energy Debt Recovery Levy and the Price Stabilisation and Recovery Levy to bring the ratios close to 21 per cent.
The budget is also expected to give an update on the upward adjustment in the Communication Service Tax to nine per cent, which took effect from October 1, this year.