As the Finance Minister, Ken Ofori Atta prepares to present government’s budget before parliament this week, some financial observers are hopeful the tax reviews announced in the NPP’s Manifesto are still prudent despite the debt stock.
President Akufo-Addo last week announced that government’s debt has hit 122 billion cedis, representing 74% of the GDP.
There are concerns how the government intends to finance the debt as the public sector wage constitutes over 70 percent of the country’s monthly revenue.
Checks by Citi Business News show that most private sector enterprises are keen on hearing the tax cuts since it will form a major input in production cost.
Speaking to Citi Business News on the issue, Economist Dr Lord Mensah was optimistic government will announce that tax cuts, but more importantly a restructuring of its public expenditure.
“If you look at the tax cut, it does not necessarily mean that there will be no tax. The fact that you are reducing taxes does not mean you are not going to take tax at all. Some taxes have been identified to impede the progress of institutions, companies. So definitely those taxes have to be removed for the firms to have a leeway to grow,” he said.
He maintained that the government economic team will embark on a massive restructuring of its expenditure to realign its spending.
“I see more of restructuring in terms of our spending, in terms of our revenue generation. I see a situation they going to broaden the way revenue is raised to ensure that we spend wisely. Spending is going to be prioritised. It won’t be like project upon project springing up across the country where it does not reflect in the people’s standard of living,” he stressed.
Dr Mensah argued that it is important to pursue such fiscal reforms since the country’s economic situation requires prudent spending.
Source: CitiBusiness News