–Expenditures Reduced
–Review Of Energy Sector Capacity Charges To Save GH1.5Bn
-GRA To Collect Revised Property Rates April Ending
-Tax Exemption Bill To Be Passed
Government has outlined about seven revenue measures after it announced more than 10 expenditure cuts as part of comprehensive measures to resolve the current economic challenges in the country.
The Akufo-Addo administration had already started the new year with spending cuts as Parliament failed to approve some key revenue streams at the appropriate time.
In January 2022, Government announced and, immediately, began implementing a 20% expenditure cut as part of fiscal stabilisation and debt sustainability measures.
This has been done through the quarterly expenditure ceiling allotments to Ministries, Departments and Agencies (MDAs).
Quarter 1 allotment is currently under implementation whiles Q2 allotments will be issued shortly
Addressing a news conference in Accra yesterday, Minister for Finance Ken Ofori-Atta explained that cutting down on expenditures alone will not be enough.
According to him, government’s focus is to control expenditure and to raise more revenues domestically.
In line with this, Mr. Ofori-Atta announced that government will begin the implementation and collection of the revised Property Rate by end of April 2022.
He said government will conclude the renegotiation of the Energy Sector IPPs capacity charges by end of Q3-2022 to further reduce excess capacity payments by 20% to generate a total savings of GH¢1.5 billion.
Government, the Finance Minister added, will also implement the E-VAT/E-Commerce/E-Gaming initiatives by end of April 2022.
Mr. Ofori-Atta said government will also roll out the simplified tax filing mobile application for all eligible taxpayers by July 2022.
In addition to these, the Finance Minister urged Parliament to fast track the passage of the Electronic Transaction Levey (E-Levy) Bill, Tax Exemptions Bill, and Fees and Charges Bill to help in revenue mobilisation.
He said whilst prioritising the Revenue Assurance, Compliance, and Enforcement (RACE) Programme, government will move to plug revenue leakages especially at the ports and the infamous fuel bunkering and small scale-mining exporters syndicate.
Digital systems
Mr. Ofori-Atta said government will partner the private sector to introduce digital systems to monitor quarrying, sand winning and salt winning to get more revenues from natural resources; and immediately enforce the “No Duty – No Exit” policy at the MPS Terminal at the Tema Port to improve revenue collection.
Monitor MDAs
Mr. Ofori-Atta said the Ministry of Finance has strengthened its Expenditure Monitoring systems and processes to ensure effective implementation of these measures.
In addition, Government has decided to take the following measures to ensure the achievement of the fiscal deficit target of 7.4% of GDP for 2022:
Expenditure cutting measures
The Finance Minister indicated that discretionary spending is to be further cut by an additional 10%. “The Ministry of Finance is currently meeting with MDAs to review their spending plans for the rest of the three (3) quarters to achieve the discretionary expenditure cuts;
ii. these times call for very efficient use of energy resources. In line with this, there will be a 50% cut in fuel coupon allocations for all political appointees and Heads of government institutions, including SOEs, effective 1st April 2022;
iii. with immediate effect, Government has imposed a complete moratorium on the purchase of imported vehicles for the rest of the year. This will affect all new orders, especially 4-wheel drives. We will ensure that the overall effect is to reduce total vehicle purchases by the public sector by at least 50 percent for the period;
iv. again, with immediate effect Government has imposed a moratorium on all foreign travels, except pre-approved critical/statutory travels;
v. Government will conclude on-going measures to eliminate “ghost” workers from the Government payroll by end December 2022;
vi. Government will conclude the renegotiation of the Energy Sector IPPs capacity charges by end of Q3-2022 to further reduce excess capacity payments by 20% to generate a total savings of GHS1.5 billion;
vii. impose a moratorium on establishment of new public sector institutions by end April, 2022;
viii. prioritise ongoing public projects over new projects. This is to enhance the efficient use of limited public funds over the period by finishing ongoing or stalled but approved projects;
ix. reduce expenditure on all meetings and conferences by 50%, effective immediately;
x. Finally, Cabinet approved that Ministers and the Heads of SOEs to contribute 30 percent of their salaries from April to December 2022 to the Consolidated Fund; We would like to thank the Council of State in their leadership in complimenting the Government on this policy.
xi. pursue a comprehensive re-profiling strategy to reduce the interest expense burden on the fiscal; and
xii. liaise with Organised Labour and Employers Association to implement with immediate effect, the measures captured in the Kwahu Declaration of the 2022 National Labour.
