Day: April 6, 2023

The General Secretary of the Traders Advocacy Group Ghana (TAGG), Emmanuel Nana Opoku Acheampong, has accused the government of importing state-of-the-art vehicles for the use of its appointees in face of an economic crisis.

According to him, the government has imported some 2023 models of V8s when it is expected to ensure fiscal discipline.

This government, he said, lacks fiscal discipline and is only interested in pilling up taxes on the people.

He said the government has not shown good faith to Ghanaians importing some of these luxury vehicles at a time many well-meaning citizens are calling on the government to cut down on frivolous expenditures.

He said the country cannot pay its debts which has resulted in the decision to give some bondholders a haircut.

Meanwhile, he bemoaned, the government, thinking about the luxury of its appointees, has introduced three new revenue mobilisation taxes without consulting the business community.

He noted that the three taxes which were passed by parliament for the country to secure a US$3 billion bailout from the International Monetary are detrimental to the growth of businesses in the country.

He explained the taxes will not spur growth for the country.

Mr Opoku Acheampong made this accusation while discussing the repercussions of the introduction of three new revenue taxes on businesses while speaking on Accra-based Asempa FM on Wednesday, April 5, 2023.

Parliament has passed three revenue mobilisation bills that are critical for Ghana’s bid to secure a Board-level agreement from the International Monetary Fund regarding a $3-billion extended credit facility to bailout the ailing economy.

They are 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. Even though the minority caucus had indicated its opposition to the bills and threatened to vote against passed all three on Friday, 31 March 2023.

Ahead of last Friday’s vote, both the Governor of the Bank of Ghana, Dr Ernest Addison and Minister of Information, Mr Kojo Oppong Nkrumah, had, separately urged parliament to pass the bills quickly to help salvage the economy.

Mr Nkrumah warned that Ghana’s already-imperilled economy will take a further tumble if the bills were not passed.

“If we don’t do what we have to do for the country, we will have major challenges”, he noted, indicating that the bills are “a set of measures we must ensure is worth passing”.

“This is a major bridge we have to cross in closing this revenue gap and ensuring that there is more liquidity”, Mr Oppong Nkrumah told Accra-based Citi TV.

Mr Oppong Nkrumah said the economic situation is dire and needs urgent salvaging.

“We are not in a good place because we don’t have access to the international capital market”, he explained.

Source: Ghana Web

Global trade growth in 2023 is still expected to be subpar despite a slight upgrade to GDP projections since last fall, WTO economists said in a new forecast on 5 April.

Weighed down by the effects of the war in Ukraine, stubbornly high inflation, tighter monetary policy and financial market uncertainty, the volume of world merchandise trade is expected to grow by 1.7% this year, following 2.7% growth in 2022, a smaller-than-expected increase that was pulled down by a sharp slump in the fourth quarter.

The WTO’s trade projections, set out in the new “Global Trade Outlook and Statistics” report, estimate real global GDP growth at market exchange rates of 2.4% for 2023.

Projections for both trade and output growth are below the averages for the past 12 years of 2.6% and 2.7% respectively.

WTO Director-General Ngozi Okonjo-Iweala said: “Trade continues to be a force for resilience in the global economy, but it will remain under pressure from external factors in 2023. This makes it even more important for governments to avoid trade fragmentation and refrain from introducing obstacles to trade. Investing in multilateral cooperation on trade, as WTO members did at our Twelfth Ministerial Conference last June, would bolster economic growth and people’s living standards over the long term.”

The 2.7% increase in world trade volume in 2022 was weaker than the WTO’s October forecast of 3.5%, as a sharper-than-expected quarter-on-quarter decline in the fourth quarter dragged down growth for the year.

Several factors contributed to that slump, including elevated global commodity prices, monetary policy tightening in response to inflation, and outbreaks of COVID-19 that disrupted production and trade in China.

Notably, trade growth last year turned out to be in line with the 2.4% to 3.0% baseline scenario in the WTO’s March 2022 initial report on the war in Ukraine, and well above its more pessimistic scenario in which trade would have grown just 0.5% as countries started to split into competing economic blocs. In the event, international markets remained broadly open.

A follow-up study the WTO released last month documented how vulnerable economies were able to compensate for essential food supplies cut off by the war by finding alternative products and suppliers.

The 1.7% forecast for trade growth in 2023, meanwhile, is up from the previous estimate of 1.0% from last October.

A key factor here is the relaxation of COVID-19 pandemic controls in China, which is expected to unleash pent-up consumer demand in the country, in turn boosting international trade.

WTO Chief Economist Ralph Ossa said: “The lingering effects of COVID-19 and the rising geopolitical tensions were the main factors impacting trade and output in 2022 and this is likely to be the case in 2023 as well. Interest rate hikes in advanced economies have also revealed weaknesses in banking systems that could lead to wider financial instability if left unchecked. Governments and regulators need to be alert to these and other financial risks in the coming months.”

Looking ahead to 2024, trade growth should rebound to 3.2%, as GDP picks up to 2.6%, but this estimate is more uncertain than usual due to the presence of substantial downside risks, including geopolitical tensions, food supply shocks, and the possibility of unforeseen fallout from monetary tightening.

Source: Ghana Web

On Friday March 31, Members of parliament passed the Excise Duty, Growth and Sustainability Levy and Income Amendment Bills after government tabled the revenue bills for consideration.

While government believes that the bills could generate about GH¢4 billion in domestic revenue when implemented, citizens, CSOs and the business community at large have berated the decision citing the already difficult economic conditions in the country.

They contend that the taxes will further burden Ghanaians and compound the woes of indigenous and foreign businesses operating in the country.

But government insists that the tax measures, when implemented, will lead to a revenue yield of approximately GH¢4.00 billion annually.

Under the Growth and Sustainability Levy, government expects to raise approximately GH¢2.216 billion in 2023, while the Income Tax (Amendment) Bill, 2022 which amends the Income Tax Act, 2015 (Act 896) is expected to yield revenues of approximately GH¢1.29 billion.

The Excise Duty (Amendment) Bill, 2022 amends the Excise Duty Act, 2014 (Act 878) and is expected to yield approximately GH¢455 million.

In view of this, GhanaWeb Business outlines the items contained under the amended Excise Duty Levy according to Parliament of Ghana.

• Non-Alcoholic beer and drinks

• Mineral water/aerated water

• Cigarettes

• Energy drinks

• Bottled/ Distilled water

• Cigars

• Fruit Juices

• Malt drinks

• Wines

• Cider Beer

• E-Cigarette

• E-smoking devices

• Negrohead

• Snuff and other Tobacco products

• Beers/Stout/Indigenous Beer

Source: Ghana Web

The government of Ghana is due to implement a 10% tax on earnings from lotteries, games of chance winnings and sports betting at the point of payout.

As part of the government’s efforts to expand the tax base and increase domestic tax revenue, gamblers should be ready to have 10% of their earnings withheld as tax should the president assent to a newly passed bill by Parliament.

Multimedia Sports Journalist Fentuo Tahiri Fentuo explained the specifics of the aforementioned taxes, stating that they will be deducted from each individual’s winnings prior to payout.

“In case you missed it by the way, there’s a new 10% tax on your winnings from betting slips. it will be deducted before the payout. Take note and stop fighting the betting companies,” he said in a tweet sighted by GhanaWeb.

Parliament passed three new tax measures during an extended sitting on Friday, March 31, 2023.

The three new taxes are the Excise Duty Amendment Bill 2022, the Growth and Sustainability Levy Bill, 2022, and the Income Tax Amendment Bill 2022.

The bills were presented to Parliament as part of government’s plans to raise about GH¢4 billion annually in domestic revenue mobilisation.

They are also crucial to help secure Board Approval for the US$3 billion International Monetary Fund (IMF) Programme after a staff-level agreement was reached late last year.

As part of measures to meet the criteria set by the IMF to qualify for a bailout, the government has completed tariff adjustment by the Public Utilities Regulatory Commission (PURC), Publication of the Auditor-General’s Report on COVID-19 spending, and Onboarding of Ghana Education Trust Fund (GETFund), District Assemblies Common Fund (DACF) and Road Fund on Ghana integrated financial management information system (GIFMIS).

The government in justifying the introduction of the taxes said they are critical for recovery from the current economic crisis.

Source: Ghana Web