The call by President Nana Addo Dankwa Akufo-Addo on member states of the African Union to work collectively to reform the global financial architecture, build and strengthen the union’s financial institutions is one of the trending stories in the Ghanaian press on Monday.
The Graphic reports that President Nana Addo Dankwa Akufo-Addo has called on member states of the African Union (AU) to work collectively to reform the global financial architecture, build and strengthen the union’s financial institutions.
He said a collective effort by the union was key to transforming the size and state of the African economy, as it would greatly help in resources mobilisation on the continent.
President Akufo-Addo made the call yesterday at the 35th Ordinary Session of the Assembly of the AU in Addis Ababa, Ethiopia, scheduled for February 5 and 6, this year.
Delivering a report as the champion of the African Union Financial Institutions (AUFIs), the President said enhanced resources mobilisation on the continent would provide the necessary impetus for growth, job creation and economic revitalisation.
President Akufo-Addo said although there was an ongoing process to establish four financial institutions (AUFIs) — the African Central Bank (ACB), the African Investment Bank (AIB), the African Monetary Fund (AMF) and the Pan-African Stock Exchange (PASE), the process had not been as smooth as had been anticipated.
According to him, none of the AUFIs had reached the minimum number of ratifications required for the enabling legal instruments to enter into force and thereby facilitate their substantive establishment.
“Regrettably, the major challenges towards the establishment of the AUFIs include the slow rate of signature and ratification of the legal instruments and the limited capacity of member states to finance their establishment,” he said.
The newspaper says that the government has questioned the international credit rating agency, Moody’s, recent downgrade of Ghana from B3 to Caa1 with a stable outlook on the Long-Term Issuer and Senior unsecured bond ratings.
In an official statement, it explained that the forecast and projections had been flawed with the use of inaccurate balance of payments statistics, lack of supporting quantitative analysis or data on Environmental, Social and Governance Credentials.
It also complained about the “omission” of key material information such as the 2022 Budget expenditure control measures – 2022 upfront fiscal adjustments.
The Ministry of Finance also protested the appointment of a new primary credit analyst for Ghana, only four weeks to the release of credit ratings.
“The Committee’s refusal to consider deferring such a monumental rating action until the analyst had enough time to more fully understand both the quantitative and qualitative aspects of the Ghana credit story,” the statement indicated.
The Ministry noted that issues identified to warrant a downgrade had been addressed by the government with the announcement of fiscal consolidation measures.
The rating agency in giving Ghana a stable outlook, however, highlighted attractive prospect over the medium term, which it said was based on balancing challenges ” against the government’s pre-pandemic track record of relatively effective policy delivery and maintenance of a variety of funding sources”.
The Graphic also reports that the Ghana Revenue Authority (GRA) has started the implementation of six tax reliefs introduced by the government to lighten the tax burden on businesses and the citizenry.
The reliefs are to cushion taxpayers against COVID-19-induced challenges and quicken the recovery to sustain and create jobs.
They include the exemption of people whose annual incomes are up to GH¢4,500 or GH¢375 a month from paying taxes, as well as the suspension of the payment of Vehicle Income Tax (VIT) on selected vehicles, including intracity commercial vehicles (trotros) and taxis and intercity/long distance buses.
The GRA will also limit the application of the flat rate Value Added Tax (VAT) scheme to businesses whose annual turnover is up to GH¢500,000, an increase from the GH¢300,000 threshold for the tax.
The rest are the waiver of interest and penalty on tax arrears for all categories of taxpayers, the halving of the withholding tax on gold exports by small-scale miners and the exemption of local textile manufacturers from paying VAT.
The implementation of the reliefs follows the passage of relevant legislation by Parliament, on the request of the government, to help ease the burden on taxpayers in the midst of the gruelling pandemic and its impact on the economy.
The Commissioner of the Domestic Tax Revenue Division (DTRD) of the GRA, Mr Edward Appenteng Gyamerah, told the Daily Graphic last Friday that by granting the reliefs, the government was forfeiting part of the revenue that should have accrued to the state through taxes in a trade-off meant to reinvigorate businesses, as well as encourage individuals and firms to diligently honour their tax obligations.
The Ghanaian Times says that Revenue mobilisation at the Hamile Border post of the Ghana Revenue Authority (GRA) in the Upper West Region, has suffered a hitch following the closure of the Ghana-Burkina Faso border, a Senior Revenue Officer, Gabriel Anokye, has said.
He indicated that prior to the closure of the borders almost two years ago; the border recorded movement of over 1,200 trucks in a month, but said the number had reduced drastically to between 700 and 800 per month and greatly affecting revenue mobilisation.
“Revenue mobilisation at the border had already gone down with the advent of the Coronavirus (COVID-19) pandemic which led to restrictions on movement and the subsequent closure of borders,” he added.
The issue came up during an interaction with the commander at his office at Hamile on the impact of the disturbances in neighbouring countries on their operations on Friday.
He stated that the trucks which passed through the border mostly transported goods from the Tema Port to neighbouring Burkina Faso, Mali, Niger and other areas and said the volumes had reduced with the disturbances in the sub-region.
“Obviously once there are disturbances, curfews will be imposed to restrict movement of people and goods and business people would want to reduce their investment because no one would want to transact business in an environment deprived of peace so definitely the number of imports will reduce,” he said.
The newspaper reports that a study by the Institute of Statistical, Social and Economic Research (ISSER), has said if excise tax was levied as a specific tax on tobacco, it would significantly improve the fiscal and public health effects in Ghana.
However, it said, since the specific tax would be eroded by inflation, the Ministry of Finance should regularly adjust the nominal excise tax by the inflation rate and the economic growth rate over time to ensure the product did not become more affordable.
The study was on Fiscal and Public Health Impact of a Change in Tobacco Excise Taxes in Ghana and was carried out by Mr Christian K. Osei and Ms Ama Fenny (Phd) of ISSER – University of Ghana and presented at a National Stakeholders Meeting on Tobacco Taxation in Ghana.
The meeting was organised by the Vision for Alternative Development (VALD), a civil society organisation, in collaboration with the Ghana Revenue Authority in Accra.
The study said in the developed economies, tobacco was less affordable over time due to increase in taxes while in the developing economies, including Ghana, tobacco products were more affordable with minimal change in taxes.
It said although Ghana imposes the highest Ad-valorem tax rate of 175 per cent in the sub-region, it was burdened with consequential challenges such as susceptibility to under-valuation of tobacco products and encouraging ‘Trading Down’ effect in favour of cheaper cigarettes, thereby reducing the health benefits.
GIK/APA