The International Monetary Fund (IMF) has proposed the scrapping of tax exemptions, adjustment of levies on fuel, and an increase in income tax as some measures the Ghanaian government could implement to boost revenue mobilization under its $3 billion support programme.
This is contained in IMF’s May 2023 country report on Ghana’s request for the $3 billion support programme.
Managing Director of the Fund, Kristalina Georgieva says the programme is only the first step towards restoring Ghana’s economic stability.
“Today’s decision is also a major milestone for the G-20 common framework. The commitment by the Official Creditors Committee to help make Ghana’s debt sustainable was essential for the approval of the Funds program and it signals important progress.
“The decision our board has taken is the beginning of the work we will do together with the authorities of Ghana for the implementation of the programme for the benefit of the people of Ghana.”
But the CEO of the Chamber of Commerce, Mark Badu-Aboagye, has raised concerns about the suggestions raised by the IMF.
According to Mr Badu- Aboagye, businesses in the country are already suffering, therefore should the conditionalities by the IMF be executed, it will worsen the struggles of businesses.
“When you introduce externalities like taxes, like high-interest rates, like levies, then you go to the bottom line and you realize that all of them are making losses, which means that this component needs to be managed.
“And that is where my concern is because these conditionalities will or may worsen that aspect of support that we need to give to businesses,” he emphasised.
Eventually, Mr Badu-Aboagye advised that, in the interest of both the country and businesses, Ghanaians should work together towards making the IMF deal a success.
Speaking on the same topic, an Economist, Professor Godfred Bokpin cautioned Ghanaians about a possible increase in taxes following the approval of Ghana’s bailout request by the IMF.
“It may not immediately take the form of new tax handles, but there’s going to be a lot of revisions to the existing tax measures that may result in you paying more taxes and a combination of that because the goal we have set for ourselves is to increase tax to GDP ratio,” he cautioned.
Meanwhile, the Finance Minister, Ken Ofori-Atta is pleading for support from Ghanaians to make the IMF programme implementation a success.
“I take this opportunity to call on all Ghanaians, investors, bilateral development partners to take up the course of Ghana and support the government in the implementation of the PC-PEG [Post-COVID-19 Program for Economic Growth] backed IMF ECF programme.”