Putting economy on sound footing

The Minister of Finance, Mr Ken Ofori-Atta, yesterday presented the 2017 Budget to Parliament, with a number of major initiatives, including reviews in taxes.

In keeping with pre-election promises, the minister announced the abolition of nine taxes and the downward review of three others (refer to our front page story), with a promise to implement tax credits and other incentives for businesses that hire young graduates.

The tax cuts, incidentally, will affect and impact everybody in society, whether middle class or low income earners.

The measures will also go a long way to reduce the cost of doing business and are expected to fuel business activities to create jobs.

It is important to note that some of the taxes that have been scrapped are even too expensive to collect and are, therefore, worth repealing. A case in point is the levy imposed on kayayei.

It is ironical, though, that the government should reduce inflows from taxes when the country is crying for funds, as debt levels have risen so high, limiting the space to borrow at concessionary rates.

The Daily Graphic, however, shares in the explanation that if the government is minded by its priorities and can plug loopholes in tax collection and expenditures, it should be able to navigate these challenging rapids with dividends expected sooner than anticipated.

It is our hope that every sector, industry and individual affected by the measures and initiatives announced in the budget will take advantage to work hard, increase productivity and possibly employ more hands.

For instance, domestic airlines should be able to pass on the tax relief to their customers to stimulate demand for their services and an ultimate boost in the economy, just as the spare parts dealers must do.

If well implemented, the Daily Graphic believes the equivalent of $1 million to be given to the 275 constituencies across the country annually should help improve local social infrastructure and contribute to poverty reduction in each of them and boost local economies.

The Daily Graphic, however, understands that budgets, being what they are – expression of interests, plans and promises – require more efforts and aggressive mobilisation of resources to execute.

Thankfully, inflows from the oil and gas sector are expected to go up to about GH¢2.36 billion, about 230 per cent over the outturn for last year.

The Daily Graphic wants to urge the government to stick to its promise to be prudent and invest in viable productive areas which will have an impact on the larger economy.

The Public Financial Management Act, 2016 (Act 921) should be implemented to the letter to ensure that ministries, departments and agencies, as well as the district assemblies, adhere strictly to expenditure plans and be prudent, rather than frugal, in their spending.

Ghana is at the cusp of either accelerated development or degenerating lower into the abyss. The Daily Graphic advises that Ghanaians choose the former, put their shoulders to the wheel and together turn the economy around for the better.

We have always insisted that example is better than precept, for which reason the government must demonstrate ample evidence that its appointees will be part of the austerity measures that are required to, in the words of the NPP government, “make Ghana work again”.