Economic gains should impact lives — TUC

The Trades Union Congress (TUC) has called on the government to work with its stakeholders, including labour unions, to ensure that the macroeconomic gains in recent years reflect sufficiently in the lives of all Ghanaians.

“We need to work together to bridge the gap between the rich and poor through the creation of decent jobs and provision of social services. We must also pay more attention to agriculture and manufacturing,” the TUC said in comments it submitted to the Minister of Finance, Mr Ken Ofori-Atta, on the  mid-year fiscal policy review of the 2019 budget statement and economic policy.

According to the largest labour union in the country, the macroeconomic performance in the last couple of years had been very encouraging.

It has aided in the continuous growth of the economy, indicative in the falling inflation and interest rates, the relatively stable exchange rate, as well as the trade and current account surpluses, were all good indications that a solid foundation was being built for further economic growth and prosperity.

Taxes

However, the TUC wanted the government to implement practical measures to strengthen revenue generation, with focus on making the existing tax regime effective rather than imposing additional taxes, adding that “the tax exemption regime must be overhauled without any further delay.”

Tax revenue is still stuck far below 20 per cent of Gross Domestic Product (GDP), in spite of some gains in recent years. In the first half of 2019, expected total revenues fell short by 15.5 per cent.

The TUC noted that a total tax revenue of 12.9 per cent of GDP in a country where GDP was growing at the rate of over six per cent was problematic, saying “Ghana is underperforming in terms of tax revenue collection, compared to Togo, Senegal, Kenya, Burkina Faso and Cape Verde.”

It said the government’s reliance on personal income taxes, corporate taxes, and petroleum taxes as revenue sources was disproportional, saying higher income taxes and petroleum taxes were adversely affecting disposal incomes and living standards of workers and their families.

“Similarly, higher corporate taxes are negatively affecting the ability of businesses to be more competitive and to create more decent jobs,” it said and questioned the status of the draft policy on tax exemptions.

“What is the status of that policy, has it been passed into law, why should we allow tax exemptions to deprive us of much needed revenue for development,” the TUC quizzed.

Housing

On housing, the TUC said the situation in the country required urgent interventions and stressed the need for the government to involve its social partners in the new initiatives.

“A unilateral, top-down, and business-as-usual approach to delivering housing could seriously undermine trust in public interventions. We must work together to ensure that the housing schemes deliver houses that are truly affordable,” the TUC said in its comments.

Other issues

The Trades Union Congress also commented on capital expenditure which it said was dwindling, the agricultural sector which it said was underperforming, public sector base pay which it said had shrunk over time, the Africa Continental Free Trade Area (AfCFTA), that it said had risks which should also be watched as the country took advantage of the protocol as well as other larger macroeconomic issues.