CSOs meet on 2023 budget

A group of Civil Society Organizations (CSOs) has convened a post-budget meeting, offering observations and proposals for the 2023 Budget Statement and Economic Policy of the Executive, presented to Parliament by Finance Minister Ken Ofori-Atta.

The post-budget debate organised in Accra focused on major economic areas such as education, fiscal policy, domestic revenue mobilisation, energy, and extractives.

Speaking on the CSOs observations on the budget presented on November 24, Mr Denis Gyeyir, Africa Programme Officer, Natural Resource Governance Institute, said the meeting sought to analyse and track how the government has taken into consideration proposals made at the CSOs’ pre-budget forum in October 2022.

He said inputs were submitted to the Finance Ministry from that pre-budget forum which was organised in compliance with the provisions of Act 921 of the Public Financial Management Act of 2016.

He said the 2023 budget aimed to review the broad capping mechanism for earmarked funds, which would have an impact on the capping of the Minerals Development Fund (MDF).

The Finance Minister proposed lowering the earmarked funds threshold from the current 25 percent of tax revenue to 17.5 percent of tax revenue, as well as migrating all earmarked funds to the Government Integrated Financial Management Information System platform.

But, Mr Gyeyir said this only partially addressed the concern with unfreezing the transfer of funds to mining communities, while the lowering of the threshold would potentially make more funds available to the MDF.

He said, “the effect is minimal and falls short of ensuring the transfer of funds adequate to meet the development needs of these communities, who unfortunately continue to suffer the negative effects of mining.”

He said the CSOs, noted in the budget that the Ministry of Energy has finalised the Energy Transition Framework, which will pave the way to net zero emissions by 2070 while ensuring socio-economic growth and the sustainable use of Ghana’s natural resources.

“It has also come to our attention that the framework was presented at the 27 Conference of the Parties to the United Nations Framework Convention on Climate Change” he said.

“We urge the government and the Ministry of Energy to engage on the final draft to get the buy-in of all stakeholders.”

On fiscal policy and domestic revenue mobilisation, Dr Alex Ampaabeng, Tax and Fiscal Policy Specialist at Act

Africa said the reintroduction of the toll levy was not considered in the budget.

He said CSOs had suggested the government scrap all road-related levies on fuel, and renewal of car documents at the Driver and Vehicle Licensing Authority and consolidate them into a single road tax, where every road user will pay an annual fee.

He said the move would allow fairness among road users by making smaller cars pay less, while bigger cars and articulated trucks pay more towards maintaining the roads.

He said, though the Tax Exemption Bill was passed in July 2022, it has not been accepted by the president, adding, “We are going to the International Monetary Fund for a $3 billion facility, but we are giving away almost $4 billion in tax exemptions.”

“Being fiscally disciplined and living within our means, as well as ensuring that we capitalise on the very potentials that exist here, can change Ghana.”

Dr Ampaabeng said the government must consider introducing an e-commerce taxation system since 2019, “we’ve been advocating for the digital service tax, but it’s not happening. The world is now fully digitized, and we urgently need to respond accordingly.”

Concerning the informal sector, he said the government must devise a novel method of taxing artisans. “It is time for the government to embrace changes in technology and adopt some efficient ways of generating revenue.”

According to the Ghana Statistical Service, the informal sector accounts for 60–70 percent of economic activity, but it only provides just about two percent of indirect taxes.

Mr Kofi Asare of Africa Education Watch said the Ministry of Finance indicated that it will increase the number of beneficiaries of the Ghana School Feeding Programme (GSFP), but this was not included in the budget.

“I was expecting that the government should have honoured the promise of increasing the number of students from 3.4 million to 4 million in the GSFP, which could not happen in 2022, in the 2023 budget,” he said.