On Thursday, March 31, 2022, the Parliament of Ghana passed four crucial financial bills that seek to generate about 4 billion Ghana cedis annually. These bills include the Excise Duty Amendment Bill 2022, the Growth and Sustainability Levy Bill 2022, the Ghana Revenue Authority Bill 2022, and the Income Tax Amendment Bill 2022. The government has stated that these bills are critical for domestic revenue mobilization and are essential to facilitate the Board Approval for the $3 billion International Monetary Fund (IMF) Programme staff-level agreement.
The bills were passed despite opposition from the Minority in Parliament, who earlier communicated their resistance to the bills. Cape Coast South lawmaker, George Ricketts-Hagan, expressed the Minority caucus’ commitment to resisting the bills as a bold statement to the government that it cannot be reckless with its expenditure and expect Ghanaians to pay the price. However, the Majority in Parliament voted in favor of the bills, citing the need for revenue mobilization to aid in the recovery from the current economic crisis.
The government has completed several measures to meet the criteria set by the IMF to qualify for a bailout. These measures include tariff adjustment by the Public Utilities Regulatory Commission (PURC), the publication of the Auditor-General’s Report on COVID-19 spending, and onboarding of Ghana Education Trust Fund (GETFund), District Assemblies Common Fund (DACF), and Road Fund on Ghana integrated financial management information system (GIFMIS).
The international and domestic bond markets are currently shut for the financing of government programs, forcing the government to rely on Treasury Bills and concessional loans as the primary sources of financing for the 2023 fiscal year. The government has justified the introduction of the taxes, stating that they are critical for recovery from the current economic crisis.
The Excise Duty Amendment Bill 2022 seeks to increase the excise duty on some petroleum products, tobacco, and alcoholic beverages. The Growth and Sustainability Levy Bill 2022, on the other hand, seeks to impose a levy on selected goods and services to finance the Ghana Infrastructure Investment Fund. The Ghana Revenue Authority Bill 2022 seeks to improve revenue collection through the consolidation of tax collection agencies. Finally, the Income Tax Amendment Bill 2022 seeks to amend the Income Tax Act to provide for incentives for businesses that invest in the country’s priority areas.
The passage of these bills by Parliament is a significant step towards domestic revenue mobilization, which is critical for the country’s economic recovery. However, it remains to be seen how effective these measures will be in generating the expected revenue, and whether they will be sufficient to meet the country’s financial needs in the long term.