We’ll resist introduction of new taxes in 2025 Budget Statement — Minority

The Minority in Parliament has pledged to hold the government accountable for promises it made to the people.

They also said they would resist any attempt by the government to introduce new taxes or increase existing taxes in the 2025 Budget Statement.

“The people of Ghana should wait for the deception of the NDC government when they present the 2025 budget as it will be taxes galore,” they added.

Event

At a press conference in Accra last Monday, a former Minister of Finance, Dr Mohammed Amin Adam, alleged that the government intended to tax the people to collect a target of GH¢200 billion in tax revenues this year.

“This government accused us of overtaxing the people of Ghana because, by the end of 2024, the NPP administration collected GH¢152.9 billion, which is a 17 per cent tax to GDP ratio taking it from President Mahama’s 13 per cent in 2016.

“How do you then turn around to expect to collect GH¢200 billion in a broken economy?” he asked.  

The former Finance Minister claimed that Ghana’s development partners and Ghanaians were not happy because the President’s message on the SONA had reversed the gains made, especially towards building confidence with investors.

He said the President had painted the picture of a country that had been economically mismanaged when, in fact, the New Patriotic Party (NPP) government “turned the corner” from the worst economic crisis in Ghana following an unprecedented global crisis between 2020 and 2022.

“Even when they were confronted with a domestic challenge in the form of Dumsor, they ran to the IMF to save the economy,” he said.

Underperformance

Drawing economic performance between the NPP and the National Democratic Congress (NDC) administrations, Dr Adam said the average growth in real GDP for the first three quarters of 2024 was 6.4 per cent.

That trend outperformed all projections and revised projections by both the IMF and the World Bank, he said.

He said under President John Mahama’s previous record in 2016, the economy grew by 3.4 per cent below a target of 5.4 per cent and 4 per cent the year before.

“He underperformed by all standards, while President Akufo-Addo over-performed.

“The trade balance also shows a significant economic improvement maintaining a surplus trend since 2017 ending 2024 with a surplus of 5.9 per cent of GDP as against President Mahama’s record of a deficit of two per cent of GDP in 2016,” he said.

The current account balance also ended 2024 with a surplus of 4.2 per cent of GDP.

Such a surplus, he said, indicated the strength of the external payments position of the country. 

“Throughout the history of when President Mahama was in office, and without any confluence of crisis as faced by the previous government, the current account was consistently in deficit, and he ended 2016 with a deficit of 3.1 per cent of GDP,” he said.

Largest reserves

Dr Adam said the Bank of Ghana had through novel innovations, accumulated high levels of reserves, the largest in Ghana’s history with $8.9 billion, adding that “this is four months of import cover”.

The NDC left office in 2016 with gross international reserves of $6.2 billion or 3.5 months of import cover, he said.

On debt servicing, he said the previous government ensured that through strong negotiations, the servicing of Ghana’s debts owed to its official bilateral creditors ($5.4 billion) had been rescheduled until after 2016.

The agreement we reached with the Official Creditors Committee for Ghana entailed a rescheduling of all debt service (principal and interest) falling due between December 20, 2023, to December 31, 2026.

“As a result, no debt service under bilateral debt will be paid until after 2026, including the debt we did not pay in 2023 since we declared the debt standstill.

“The rescheduled amounts are expected to be repaid in two instalments, respectively 16 and 17 years after their contractual due date,” he said. 

He added that delays in payments would be compensated for by interest accruing on the amounts, at concessional rates ranging between one per cent and three per cent.