2023 Budget Can Only Be Fully Approved After These

Following the presentation of the 2023 budget statement and economic policy by the Finance Minster on November 24, 2022, the house commenced a debate on the budget.

After five days of debate, the house usually will approve the budget after the conclusion of the debate.

However, this does not mean everything presented by the finance minister in the budget has been approved by the house.

The house is now expected to scrutinize the budget estimates for the Ministries, Departments and Agencies, (MDAs).

The heads of the department, ministers are expected to justify their allocations at the Committee. A report on these budget estimates will then be brought before the house for approval.

And for the revenue of financial bills, there are two major ones, the E-Levy, and the VAT.

For the E-Levy, government is seeking to remove the GH¢100 daily threshold on the Electronic Transfer Levy (E-levy) and reduce the headline rate from 1.5 percent to 1 per cent.

“We will review the E-Levy Act and, more specifically, reduce the headline rate from 1.5 per cent to 1 percent of the transaction value as well remove the daily threshold.”

The E-levy review, among other reforms and interventions, according to the Finance Minister, forms part of revenue measures aimed at restoring macroeconomic stability and accelerating economic transformation.

VAT Increment by 2.5 per cent

Government announced an increment in Value Added Tax (VAT) by 2.5 percent for consumers of goods and services.

The VAT, which was last increased in 2014, when Ghana was under a Fund programme will now be set at 15 per cent.

With regards to the bills, it is expected to be presented before the house for it to be passed into an Act.

The appropriation bill will also have to be passed which will give the President the legal backing to spend from the Consolidated Fund at the expiration of the 2021 Appropriation Act.

Even though the Budget has been approved some of the bills, can be rejected.

In a Facebook post, the member of Palriament for North Tongu, Samuel Okudzeto Ablakwa explained that the budget approval is a process of 4 stages and not 1 event.

"What took place yesterday was just the conclusion of debate and approval of the policy. (Stage 1) We would now consider the estimates of the various Ministries, Departments, Agencies and other Cost Centres.

"This is where controversial allocations such as the GHS1.4billion for Contingency Vote, GHS80million for National Cathedral, GHS10million for so-called “Defence Advisory Services” would come under surgical scrutiny for possible rejection or downward review as the case may be. It was at this stage last year we successfully removed that dubious GHS241million allocation for “e-Transaction Levy Services. (Stage 2).

"We shall then move into the 3rd stage to consider the revenue bills. This is where government’s proposed obnoxious 2.5% VAT increase and the e-Levy threshold removal will be presented to the House as Bills requiring parliamentary decision. The NDC Caucus has already indicated we shall be voting against these revenue bills. (Stage 3).

"The final stage is the approval of the Appropriation Bill which is an itemized sum of all approved estimates by the House based on which government can spend in the ensuing year. (Stage 4)."

The Minority Position

The minority has threatened to disapprove the 2023 budget estimates, and debt restructuring until some five conditions are met by government.

According to Haruna Iddrisu, they will not accept the debt restructuring programme announced by the finance minister.

This comes after Finance Minister Ken Ofori-Atta announced that Ghana is embarking on a debt exchange program to ensure that debt levels are brought to sustainable levels.

At a press conference, the minority leader said, “Let me state, without any fear of contradiction, that the form and structure of the debt restructuring plan announced by Ken Ofori-Atta are unacceptable to us, and we simply will not accept it."

He also raised concerns over why the government failed to announce the exchange programme in the budget statement presented to parliament.

According to Haruna Iddrisu the minority are aware that "the Akufo-Addo/Bawumia government have become desperate and is compelled after reckless mismanagement of the economy to achieve fiscal consolidation."

Below is a listicle of the conditions the minority has demanded before the budget estimates for 2023 will be approved;

1. The resignation of the entire Economic Management Team and in particular Alhaji Bawumia from his position as Chair of that obviously moribund body. 2. The immediate resignation or dismissal of the Finance Minister, Ken Ofori-Atta 3. Immediate reduction in the number of Ministers and political appointees at the Office of the President by half. 4. Removal of all non-essential expenditure in the 2023 budget including the GHC 80 million allocated to the National Cathedral

5. Reinstatement of the GHC100 exemption threshold for e-levy payment.

Following the above, the minority in parliament reiterated that the country's ailing economy characterized by unsustainable debt, inflation, and unprecedented credit rating downgrades, among others.

Source: ghanaweb.com