Experts share insights at CITG’s post-2024 budget discussion forum

Following the presentation of the 2024 Budget Statements and Economic Policy by the Finance Minister, Ken Ofori-Atta, on November 15, the Chartered Institute of Taxation of Ghana (CITG) has held a virtual post-budget discussion forum to analyse how individuals, businesses, and the government can make the most of the budget.

Held on Wednesday, November 29, 2023, the forum assembled tax industry leaders and experts, including Emmanuel Obeng Asiedu (Chairman of the CITG Council), George Ohene Kwatia (President of CITG), Edward A. Gyamerah (Commissioner, Domestic Tax Revenue Division of the Ghana Revenue Authority), Gideon Ayi-Owoo (Partner, Tax and Regulatory, Deloitte), Evans Asare (Partner, Deal Advisory, KPMG), and Daniel Atwere Nuer (Head Tax Policy Unit at the Ministry of Finance).

Partner at PwC, Abeiku Gyan Quansah, critiqued the proposal to ease vehicle importation for medical personnel, arguing that this will not augur well for local vehicle assembly industries.

“We have a Ghana Auto Mobile Development Programme meant to improve locally assembled vehicles; why is the government not turning its attention to it to see how best we can help our medical professionals procure and create local income from purchasing things locally rather than to give them waivers on imports?”

He also repeated concerns about the expansion of the VAT invoicing system and its potential pitfalls.

“With VAT invoice expansion and using certified invoices as a grant for income tax deduction, various issues come up in analysing it—how well will these issues be dealt with—so as not to create situations that could have been avoided.”

In his submission, Partner at the Deal Advisory Unit of KPMG, Evans Asare, explored key avenues for sustainable socio-economic development and the welfare of Ghanaians in light of the current state of the economy.

He said that focus needs to be placed on agriculture and industry to add value to products and create employment to generate income. He continued by reiterating that. According to him, “it is critical that the state of the economy improve in a way that generates the kind of growth and employment that is required.”

Regarding budget priorities for 2024, which entail macroeconomic stabilisation, domestic revenue mobilisation, structural reforms, leveraging climate financing for green growth, promotion of digitization, road infrastructure, and the 2024 general elections, among others, Mr. Asare tasked the private sector, especially agriculture and aquaculture, to invest and produce more so as to reduce the importation of goods such as poultry.

“The whole initiative on agribusiness and agriculture in terms of planting for food and jobs is an important policy, but a specific targeting of this will be essential to making the private sector interested in going into these projects,” he said.

Another initiative, which he believed would robustly support the sustainable development of aquaculture, will be for the government to support about 35,000 medium- and small-scale fishermen with fishing inputs, training, and extension services to produce fish and employ about 80,000 young people by the end of 2024.

In the area of digitization and technology, Mr. Asare further highlighted an initiative by the government in the budget that has been designed to support the existing private sector but to train over 200,000 young people in digitization, while the private sector will develop sustainable projects that can access the Global Climate Fund.”

He advised that “for these initiatives to be successful, the government needs to ensure the economy is well structured, ensure value addition and linkages, add incentives to get private sector and FDIs into proposed initiatives so intended value can be gotten, while de-risking these investment opportunities through secure land, guarantees, and market access.”

In addressing the critical “Pitfalls Posed by the 2024 Budget and Economic Statements to Mitigate Economic Challenges in 2024 and Beyond,” Tax Partner from Deloitte Ghana, Gideon Ayi-Owoo, said there was a loud silence on some of the policies that were expected to be amended.

He pointed out that “some of these expected policies were based on the feedback we heard from the business community where they were looking forward to amendments, but the government had some tax targets to meet.”

Mr. Ayi-Owoo asserted that raising revenue solely on taxes will not help with infrastructural development, hence the need for the government to consider more Public-Private Partnership (PPP) projects.

“We have to make PPP more rapid, as that will help the government to be able to do a lot of the infrastructure that they have been trying to do, and I think this is a fair and easier way to continue with infrastructure development without necessarily always relying on taxes or going to other external financial institutions.”

This move, he believes, will reignite certain areas of the economy that have slowed down because of the government’s inability to provide adequate financing for capital infrastructure in the economy.

He stated that the service industry, including telecos and insurance businesses, should be given fewer tax expectations so that they can increase the number of people they employ in the country.

He recommended that, in order to address the pitfalls in the budget or economy, an independent advisory committee should be established to provide an impartial way of looking at tax generation.

For his part, the Head of Tax Policy at the Ministry of Finance noted that some of the administrative measures in the budget are to ensure that the objectives of the Ghana National Revenue Policy, which will shape the development of tax and non-tax revenue policy in Ghana, as well as “provide a principle that will underpin the design of the revenue system to support sustainable economic growth and efficiency,”

“The critical things that came to life in the discussion were: what can we do as individuals and organisations to collectively support the authority to achieve the revenue target and then finance socioeconomic development? If the informal sector is as large as we are led to know, what is the policy effort and related intervention to transport them into the formal sector to support the economic development of Ghana instead of continually taxing the formal sector?” the Registrar of CITG, Dr. Frank Gbadgo, summarised.