Parliament approves special levies to stabilize economy

Parliament on Wednesday gave assent to two Bills intended to shore up revenues to bridge this year’s budget deficit and raise funds for national development.

The proposals included the National Fiscal Stabilization Levy Bill and the Special Import Levy Bill.

The National Fiscal Stabilization Levy is expected to enable government to generate revenues topping some Ghȼ88 million to support shortfalls in this year’s budget.

The Bill will re-impose a stabilisation levy of five percent on profit before tax of selected companies and institutions for a period of 18 months to raise funds for fiscal stabilisation of the economy.

Government in 2009 introduced the National Fiscal Stabilisation Act, 2009 (Act 785), to garner resources for economic expansion.

However, following the stability of the economy in 2011, the Act was repealed but due to the implementation of the Single Spine Salary Scheme among others threatening to crowd out investment in other sectors of the economy, the levy is being re-imposed to help generate revenue to meet those shortfalls.

The Special Import Levy Bill, on the other hand, forms part of measures taken by government to increase revenue generation to support social services and infrastructure programmes outlined in the 2013 budget.

The Bill, which seeks to impose a special import levy on selected imported goods at the point of entry, is expected to yield revenues in the range of Ghȼ208 million over the remaining six months of the year.

Goods to be levied under this provision include outboard motors, fishing nets, agricultural machinery, dairy milking products, energy saving bulbs, book binding machines, cutlasses and some farming inputs.

The Finance Committee of Parliament’s report on both Bills recommended that the Bills should be adopted in view of the stabilising effect those extra revenues to be generated would have on the economy and development.

Mr Cassiel Ato Baah Forson, a Deputy Finance Minister, told the House that revenue to be obtained from that proposal would “ensure fiscal stability and provide resources for investment in social services and infrastructure across the country.”

The House, however, rejected by consensus a proposal in the Special Import Levy Bill to impose a one percent levy on fertilizer.

Members argued that such increment would raise the price of fertilizers, lead to food price increases and impoverish the many subsistence farmers who lived below the poverty line.

Members also raised issues with the levy on energy saving bulbs, insisting that it defeated the purpose of government’s campaign on energy conservation in the country.

Thus, Dr Mathew Opoku Prempeh, Member for Manhyia South, urged government to waive that request to levy energy saving bulbs imported into the country.

Papa Owusu-Ankomah, Member for Sekondi, also proposed that the House amended the part of the Bill to waive the levy on outboard motors and fishing nets as this would overburden poor fisher folks.

“By parity of reasoning, the amendment should be extended to outboard motors. We should delete any levy to be imposed on outboard motors,” said Papa Owusu-Ankomah.

But the Deputy Finance Minister objected to the proposal stating that since government was already subsidising premix fuel to the tune of about 50 percent, a levy on outboard motors was fitting.

Source: GNA