Parliament approves three new taxes; expected to rake in 3.96 billion cedis

Parliament has approved four financial bills presented by the government aimed at generating approximately 4 billion Ghana Cedis annually to boost domestic revenue mobilization.

The bills, which include the Excise Duty Amendment Bill 2022, the Growth and Sustainability Levy Bill 2022, the Ghana Revenue Authority Bill 2022, and the Income Tax Amendment Bill 2022, are also essential for facilitating the Board Approval for the $3 billion International Monetary Fund (IMF) Programme staff-level agreement.

The measures are part of the government’s efforts to meet the IMF’s criteria to qualify for a bailout.  They were passed by a 136-137 majority decision.

To achieve this, the government has completed tariff adjustments by the Public Utilities Regulatory Commission, published the Auditor-General’s Report on COVID-19 spending, and onboarded the Ghana Education Trust Fund, District Assemblies Common Fund, and Road Fund on Ghana integrated financial management information system.

The opposition Minority in Parliament had expressed its disagreement with the bills, with Cape Coast South lawmaker George Ricketts-Hagan stating that it sends a bold statement to the government that it cannot be careless with its expenses and expect Ghanaians to bear the burden.

The international and domestic bond markets are currently unavailable for government programme financing, leaving Treasury Bills and concessional loans as the primary sources of funding for the 2023 fiscal year.

The government defended the introduction of taxes as a necessary measure to aid recovery from the current economic crisis.

The new taxes are expected to rake in an additional 3.96 billion cedis ($340 million) in revenue this year and satisfy a key requirement for the International Monetary Fund to approve a $3 billion bailout.

Ghana, which had hoped to receive approval for the IMF support package this month, is now targeting an agreement by the end of April after bilateral creditors give the necessary financial assurances, Central Bank Governor Ernest Addison said earlier this week. The country is also in talks with private creditors after unilaterally suspending payments on $13 billion of Eurobonds.