Graphic Business News

Govt. Business

Vexation greets luxury tax implementation

By: Kester Aburam Korankye

Anger and rejection have greeted the implementation of the levy imposed on vehicles with high engine capacities.

Some of the car owners are complaining that the targeting of contributors was misplaced.

The GRAPHIC BUSINESS observed at two separate private garages mandated to test and issue roadworthy certificates to vehicles that although vehicle owners were complying with the tax requirement, they were only doing so to avoid legal actions against them.

One such car owner, Mr Reginald Owusu, who had visited the Achimota Driver and Vehicle Licensing Authority (DVLA) centre on August 6 to renew the roadworthy certificate of his 1999 Ford Expedition told the paper that, “ I think the targeting of who pays this levy is misplaced”.

He explained that his old vehicle, which was almost out of shape, could not be classified as a luxury car and added that the government should have limited the imposition of the levy on newly imported vehicles wi

New inflation rate to be announced tomorrow

By: Daniel Ofosu Dwamena

The Ghana Statistical Service (GSS) will announce a new inflation rate tomorrow. The new figure will reflect the current consumption trands in the country.

It is not clear which direction the rate will be heading but it has been predicted that whether up or down, the change will be marginal from the last rate of 10 per cent as of June.

Meanwhile, the GSS, has completed the rebasing of the consumer price index (CPI), the average change in prices of goods and services, which is measured by inflation.

The new CPI takes its base year from 2017, up from the old one, and used 2012 as the base year, and is expected to ensure that the basket of products and services used in calculating inflation reflects current consumption trends.

‘One district, One factory’: GAWU calls for thorough assessment before implementation

By: Ama Amankwah Baafi

The General Secretary of the General Agricultural Workers Union (GAWU), Mr Edward Kareweh, has asked  government to do a thorough assessment of why industries collapse in order to serve as a guide as it implements the ‘one district, one factory’ (1D1F) programme. 

“We do not have the commitment to ensure that when we start a programme we implement to the end. Did the government consider the reason why industries collapse before coming out with the IDIF? Where are they going to sell their produce?  Is the market now free?” he quizzed during the GRAPHIC BUSINESS / Stanbic Bank Breakfast meeting in Accra.

It was on the theme: “Unlocking Economic Growth Through Manufacturing-Cost, Quality and Competitiveness.”

Mr Kareweh said Ghana was not particular about why industries collapsed but interested in bringing in new ones which were likely to suffer the same fate as those that had collapsed. 

“I’m just worried that if we don’t take care, the I

Corruption, indiscipline killing industrialisation — Oteng-Gyasi

By: Maxwell Akalaare Adombila

A former President of the Association of Ghana Industries (AGI), Dr Tony Oteng-Gyasi, has observed that the lack of discipline and incessant corruption has made it impossible for the country to use import duties and tariffs as economic tools to curtail cheap imports and stimulate growth in the local industries.

This is in spite of the fact that temporary but targeted import tariffs have proven to be effective in warding off imports and promoting domestic industrialisation, he said at the GRAPHIC BUSINESS/Stanbic Bank Breakfast Meeting on manufacturing on July 31.

While explaining that he was not advocating  protectionism for local firms through import tariffs, Dr Oteng-Gyasi said Ghana, unlike other countries, had adopted “a lazy approach” to import duties, making it ineffective in even raising revenues, talk less of promoting industrialisation.

He mentioned the pervasive evasion of import duties, fake invoicing, misdescription of goods, undervaluat

Govt to get tough on tax evaders • Set to audit, prosecute defaulters

By: Jessica Acheampong

The government is to commission an audit of local and multinational companies operating in key sectors of the economy as part of measures to check tax evasion and transfer mispricing.

The move had become necessary following the continued loss of revenue by the state as a result of the failure of some companies to properly honour their tax obligations.

Although no timeline was given, the Minister of Finance, Mr Ken Ofori Atta, said all companies found to be involved in any illegalities would be penalised and made to pay all the outstanding taxes.

“The government will commission audits of local and multinational enterprises in mining, oil and gas, telecommunications services, transfer pricing and high net worth Individuals to address transfer mispricing and other forms of tax evasion,” he said while presenting the mid-year fiscal policy review of the 2018 budget statement.

Govt revises expenditure downwards

By: Maclean Kwofi

The government has revised downwards, its total expenditure (including arrears clearance) by 0.48 per cent to GH¢61.7 billion for the 2018 financial year.

The downward revision is expected to help the government to close the year with the end-year fiscal deficit target of 4.5 per cent, other than that, it would have ended the year with a fisical deficiet of 4.9 per cent.

Per the 2018 budget, the government was supposed to spend GH¢62 billion, representing 25.7 per cent of the country’s gross domestic product (GDP) and an annual growth of 14.5 per cent for the entire year.

But, the Finance Minister, Mr Ken Ofori-Atta, during the presentation of the Mid-Year Fiscal Policy Review of the 2018 Budget Statement on July 19 in Accra, said that had been reviewed downwards from GH¢62 billion to GH¢61.7 billion.

The key revisions to expenditure are in wages and salaries, goods and services, interest payments (specifically domestic interest) and dome

Tax more or spend less? • Revenue shortfalls give govt nightmare

By: Maxwell Akalaare Adombila

SADDLED with revenue shortfalls in the midst of rising expenses, the government is torn between cutting expenditure and risk strangling growth or raising more revenue through the introduction of new or increasing existing taxes in an economy that is projected to expand by 6.8 per cent.

The challenge is similar to the one experienced in the same period last year, when revenue shortfalls in the first five months of the year prompted a GH¢2.2 billion cut in public expenditure.

But unlike the 2017 Mid-Year Budget Review (MYBR), which announced a corresponding GH¢1.4 billion drop in the year's revenue target, the Finance Minister, Mr Ken Ofori-Atta, will use this year's review to announce a combination of measures that will seek to boost revenue inflows and prune expenditure downwards in a manner that will still keep the deficit at the budget target of 4.5 per cent of GDP.

Drop rates in line with gains • Banks urged

By: Maclean Kwofi

THE Minister of Business Development, Dr Ibrahim Mohammed Awal, has indicated that the government will not relent in its quest to get the commercial banks to reduce their interest rate to at least 18 per cent in accordance with the relative gains made in some major macroeconomic indicators.

Achieving this, he explained, would enable businesses in the country to have cheaper sources of funds to enhance their operations.

At a signing ceremony for a partnership between a Ghanaian company, Lych Capital, and the Corlido Group from Netherlands on July 10, in Accra, Dr Awal said the government would do everything possible to ensure the banks reduced their rates for businesses to grow.

Commercial banks in the country have refused to reduce their lending rate to correspond with the central bank’s base rate which is currently at 18 per cent.

Govt cautioned of boundary dispute with Togo

By: Jessica Acheampong

The Public Interest and Accountability Committee (PIAC) is cautioning government of an impending maritime boundary dispute with Togo over oil exploration in the East Keta Ultra Deep Block.

According to the committee – which has oversight responsibility over the prudent management of oil revenues – the Togolese authorities are disputing the existing maritime boundary on which basis a block was jointly awarded to companies to begin exploration.

It has thus urged government to take urgent steps to delineate the border and to initiate steps to start a discussion to help resolve the dispute at an early stage.

Making the recommendation in its 2017 annual report, the committee explained that the companies awarded the block are being  intimidated by the Togolese Naval Forces anytime they attempt to explore close to the border and this meant that there was some lack of shared understanding of the limitations of the boundary.

Why GETFund wants to borrow GH¢2.3bn

By: Maxwell Akalaare Adombila

TO help contain the rising demand for educational infrastructure nationwide, the Ghana Education Trust Fund (GETFund) has decided to borrow a total of GH¢2.3 billion from a consortium of financial institutions to be used to fund the construction and completion of basic school buildings, as well as vocational and technical training centres.

The loan is to be backed by a portion of GETFund's allocations under a financing arrangement that mirrors the decades-old cocoa syndication loan, where the Ghana Cocoa Board (COCOBOD) lends from a consortium of local and international financiers on the back of cocoa proceeds. 

But unlike the cocoa loan, which is normally paid off within 10 months, the proposed GETFund loan will have a tenor of two years.

Consequently, a financing team, comprising officials from the Ministries of Education and Finance and the GETFund, has been put together to help execute the novel transaction before September this year.