All is set for the Finance Minister; Ken Ofori-Atta to present the Mid-Year Review on the Floor of Parliament today.
The review is as a result of the country’s Financial Management Administration Act which requires the Finance Minister to come before Parliament not later than July 31, prepare and submit to Parliament a Mid-Year Fiscal Policy review.
The Finance Minister is expected to review the estimates outlined in the Budget that he presented in that financial year.
This often allows the Finance Minister the opportunity to review the targets, especially in areas such as:
- A brief overview of recent Macroeconomic Developments of Governments
- Update of Macroeconomic forecast undertaken by the government
- Analysis of total revenue and expenditure and performance for the first 6 months of this year
- Also where necessary, revise the Medium Term Budget outlook the budget outlook and Expenditure framework.
Ahead of the review today, the Minority in Parliament have hinted of some taxes going up.
They explained that VAT could reach 20 per cent, while SSNIT contributions are expected to go up.
This would result in VAT going up by 2.5 percentage points from 15 per cent to 17. 5 per cent, while the National Health Insurance Levy would also go up by 2.5 per cent, totaling 20 per cent.
Increase the SSNIT Contribution to NHIS by 2.5 percentage points with 1 percentage points for employers and 1.5 percentage points for employees.
But report says government will not increase the rate for Value Added Tax (VAT) as being speculated by the Minority.
Minority Spokesperson on Finance, Cassiel Ato Forson said government will in the mid-year budget review which will be presented to Parliament on Thursday July 19, 2018, announce excise tax on luxury vehicles (10 percent on vehicles with engine capacity above 3.5 cc), an increase in the communications service tax (from 6 percent to up to 12 percent) and the re-introduction of VAT on financial services which was scrapped in the 2017 budget.
Speaking at the Minority’s version of a mid-year budget round table, Cassiel Ato Forson said the economy was heading towards dangerous terrain.
The suspected VAT increase has evoked mixed feelings among Ghanaians and the business community. The Ghana Union of Traders Association (GUTA) wants the government to rather widen the tax net.