Road Toll Abolished

Ken Ofori-Atta

The government has abolished all tolls on public roads and bridges, Finance Minister, Ken Ofori-Atta, announced yesterday in Parliament during the presentation of the budget statement and economic policy of the government for the 2022 fiscal year.

“Over the years, the tolling points have led to heavy traffic on our roads and lengthened travel time from one place to another, impacting negatively on time and productivity. The congestion generated at the tolling points, besides creating these inconveniences, also leads to pollution in and around those vicinities,” the minister said, adding “to address these challenges, Government has abolished all tolls on public roads and bridges.

Immediate Effect

He said “this takes effect immediately the Budget is approved. The toll collection personnel will be reassigned. The expected impact on productivity and reduced environmental pollution will more than off-set the revenue forgone by removing the tolls.”

The minister said to compensate for the road tolls, the government is looking to introduce innovative ways of raising revenue such as the proposed 1.7% phone transactions levy payable by mobile money (MoMo) users per transaction above GH¢100 and added that it will help to shore up revenue inflows to fund road projects.

The minister said that although the tolls were helping in fixing and maintaining roads, the benefits of not having them currently outweigh their purpose.

“Government will complete its work with this House to pass the fees and charges bill for implementation in 2022. These fees and charges will be subject to automatic adjustment consistent with the annual average inflation as announced by the Ghana Statistical Service (GSS).

“A comprehensive review will be conducted after every fifth-year taking into consideration, other factors besides inflation including, improvement in quality of service delivery and privatisation of some of the services, where feasible.

“Our roads need fixing. Our roads are being fixed. It is true that more roads have been fixed and are being fixed over the last five years than any relative period in the entire history of our nation. We even want to do a lot more and this budget will cater for this,” he disclosed.

He said “that is why for decades, Government after Government imposed and maintained tolls on some public roads to raise funds for road construction and maintenance. This is the situation in many countries.”

Tax Streamline

The minister said that the government is streamlining the tax regime to prevent large companies from abusing the tax exemptions that are granted.

He said the government through the Exemptions Bill which will be laid in Parliament in 2022 will check wasteful tax exemptions to ensure the country gain significant returns from companies enjoying tax exemptions.

“We wish to reiterate that we are in challenging times, which require radical measures, so let us embrace these new policies to enable government to address the fundamental issues affecting the economy, to ensure that, our Nation continues to maintain its position,” he said.

Textile Industry

Mr. Ofori-Atta announced a two-year extension of the Value Added Tax (VAT) relief on African prints for textile manufacturers in the country.

He said the extension is to enable them to resuscitate their operations and provide affordable textiles to the market.

VAT Flat Rate

The minister said that the 3% VAT flat rate on the supply of goods by wholesalers and retailers which was introduced in 2017, will now be limited to only retailers and all other supply of goods and services will attract the standard rate.

He said the government is using the flat rate to provide a simplified system for small scale enterprises, adding that the rate will be applied to retailers with annual turnover not exceeding GH¢500,000.

No Layoff

The Finance Minister said that no public sector worker was laid off despite the impact of the Covid-19 pandemic on the country’s finances.

“I am proud to announce that not a single public sector worker was laid off as a result of the impact of the pandemic on our economy and finance. We have managed to pay them monthly and we are grateful to the unions for their cooperation in this regard.”

Mr. Ofori Atta further said small and medium enterprises have been the hardest hit following the outbreak of the pandemic, and the government has initiated steps to support the SMEs cope with the situation.

“Under the Coronavirus Alleviation Programme Business Support Scheme (CAPBuSS), Ghana Enterprises Agency provided 302,001 successful applicants across various sectors and regions with loans amounting to GHȼ523.11 million.

“Mr. Speaker, we also ensured payment of our obligations to contractors and provided payroll support to some State-owned Enterprises to guarantee jobs.

“Thankfully, our President led and acted, decisively and intelligently and his leadership paved the way for many other countries in Africa and beyond,” he stressed.

Burden Share

The Finance Minister called on Ghanaians to join hands in growing the economy, and said every adult will have to contribute to the delivery of critical infrastructure, social services and improve lives.

“A key focus of the budget fiscal consolidation to enhance debt and fiscal sustainability as we implement our economic revitalisation and transformation programme post Covid-19 to save more lives from the Covid-19 pandemic and better the lives of Ghanaians.

“It is for this reason that Government is proposing for the consideration and approval of Parliament the revenue enhancing and expenditure rationalisation measures in this budget.

“Indeed the approval and implementation of the measures will lead to significant fiscal adjustment from a projected fiscal deficit (including Energy IPP Payments and Finsec Clean-up cost) of 12.1% of GDP in 2021 to 7.4% in 2022, representing an adjustment of 4.7 percentage points in just one year.

“Mr. Speaker, not only are we significantly bringing the fiscal deficit down, we are posting a primary surplus of 0.1% of GDP in 2022 from a negative primary balance of 4.7% in 2021,” he pointed out.

He said such measures “will no doubt slow down debt accumulation and will put the debt to GDP ratio on a declining path. We expect this new paradigm shift to create the needed fiscal space to continue to support broad-based inclusive growth.”

“Mr. Speaker, as a people, we are very proud of our history and heritage. We believe in our ability to be self-sustaining. After all, we are a country that became the world’s largest producer of Cocoa with farmers working on small farmlands. These farmers bring in US$2billion annually,” he said, adding “we believe in our capability to mobilise the resources (human, natural and domestic finances) to transform our lives. This will require that we share the burden so that every adult Ghanaian will contribute to the delivery of critical infrastructure, social services and improve lives. This revenue mobilisation must be a collective effort and we must all contribute to make this a reality.”

“Mr. Speaker, the Ghana Statistical Service has completed the preliminary report on the 2021 Population and Housing Census. The Census provided useful information that will inform the effective planning and implementation of government policies. However, the data presented also shows some trends that need to be addressed to build a more equitable society,” the Finance Minister disclosed.

By Ernest Kofi Adu

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