The mid-year budget review will be presented to the Parliament today, Thursday, July 29, 2021 by the Financial Minister, Mr. Ken Ofori Atta.
The budget review is to present the opportunity to reverse macroeconomic targets and present a comprehensive economic outlook for the rest of the year in accordance with Article 179 of the 1992 constitution and Public Financial Management Act 921.
The budget review is based on inflow and outflow within the first six months of the year.
He is expected to announce projects and programmes to create one million jobs over the next few years.
The theme of the 2021 budget is ‘Economic Revitalisation through Completion, Consolidation and Continuity’, sought to carefully balance fiscal consolidation and facilitate the recovery of the economy following the COVID-19 pandemic.
An amount of GHS129 billion was approved by Parliament for the services of the government for the 2021 financial year.
The introduction of some taxes that were widely criticised by various stakeholders were the major topics from the budget.
The direct tax measures introduced included the 5 percent financial sector clean-up levy, the 30 percent income tax rebates for companies operating in the hospitality sector among others, the suspension of instalment income tax stamp and vehicle income tax payments from April to December 2021, and the extension of the exemption of income tax on capital gains made from the realisation of securities listed on the Ghana Stock Exchange beyond 2021.
Moreover, the indirect tax measures included a 5.7 percent increment in prices of petrol and diesel as part of the new levies.
Also, the increment was as a result of the new 10-pesewa Sanitation and Pollution Levy, and a 20-pesewa levy to cater for charges on the country’s excess power capacity.
There was also a 1 percent COVID-19 levy which was a one percentage point increase on both the existing VAT Flat Rate Scheme (VFRS) and the National Health Insurance Levy (NHIL).
The taxes were necessary for funding the coronavirus vaccine rollout as well as expanding general health infrastructure, the Financial Minister emphasised.
In addition, he said, the Fitch Ratings in its assessment at the time said the slow pace of the consolidation path outlined by the budget statement and by the accompanying medium-term fiscal framework leaves Ghana exposed to a heavy debt-service burden and risks of fiscal slippage.
He continued that, Ghana’s debt stock has risen to GHS332 billion with a debt to GDP of 76.6 percent.