Bussiness
Go to IMF for liquidity support; your finances not good – gov’t told
Government has been advised to overlook public criticisms and go for financial support from the International Monetary Fund to put the fiscal economy in a better shape.
According to Head of Finance Department at the Valley View University, Dr. Williams Peprah, the time is up for government to go to the Fund for liquidity support.
Finance Minister, Ken Ofori-Atta, last week pointed out that the public sector could no longer employ new people and therefore fresh graduates should go into entrepreneurship.
But Dr. Peprah who is one of the few persons to predict that the government could turn its attention to the Fund because of the precarious nature of public finances, tells Joy Business the return to the Bretton Wood for an economic programme is inevitable.
“I’ve always been mentioning the fact that we’ll have to seek help from the IMF to be able to survive. My assertion is based on the budget [2021] and then also the actual figures as presented by the Finance Minister. Just recently, the Finance Minister confirmed that our payroll is full, and also we have gone above our payroll limit within the budget.”
“Government says it’s going to spend ¢25 billion. Now we’re around ¢30 billion which is about 20% higher than what we projected to spend. So looking at this particular issue on our wage bill, and then also noticing that our revenue generation from taxation has gone down, this is the reason why I’ve stated that we will need to go to IMF for some liquidity support.” Dr. Peprah further intimated.
On why government is playing politics with the state of the economy, Dr. Peprah said it is wrong for politicians to play politics with the economy, adding, “I’ve always been arguing that we should do away with the politics and face the reality. Now the reality is that, we don’t have the liquidity to survive as a country”.
“We’ll need support from IMF…I mean liquidity injection. I think in your report this morning, you reported that banks are going to slowdown in investing in government securities because Christmas is coming. Their customers should be coming in for more funds from the banks, so they have to slowdown their investments in government securities”, he pointed out.
“This is the right time for government to go to IMF, go with a plan. First is your labour wage bill, that you’re going to control your wage bill and based on that, also show how some capital expenditure and also recurrent expenditures will be managed. These are the areas that we have to look at.”
Every support from the IMF comes with conditionality, but Dr. Peprah said the government should outlined its plan to the Fund, a strategy the Bretton Wood institution will accept.
“As a country, we can go with our own plan and tell IMF that we’re going to restrict ourselves when it comes to labour, employment. We’re going to restrict ourselves when it comes to capital expenditure and we’re going to restrict ourselves when it comes to recurrent expenditures.”
Source: Joy Business
Bussiness
Ghana’s GDP shows economy is fast recovering despite DDEP – Finance Ministry
Ghana’s Gross Domestic Product (GDP) indicates a rapid economic recovery despite global challenges and ongoing debt restructuring, according to the Ministry of Finance (MoF).
The Ministry in a statement today indicated that latest data from the Ghana Statistical Service (GSS), cumulative economic growth for the second quarter (Q2) of 2024 reached 6.9%, a notable increase from the 4.7% recorded in the first quarter of 2024.
The MoF statement further noted that, “The economy’s robust recovery is in response to the macroeconomic stability and growth interventions that government is pursuing under our IMF-supported Post Covid-19 Programme for Economic Growth (PC-PEG).”
According to them, the overall real GDP growth for the first half of 2024 rebounded strongly, with year-on-year GDP growth averaging 5.8% for the period, significantly higher than the 2.9% recorded in the same period in 2023.
By Edem Mensah-Tsotorme
Read full statement below
Bussiness
Facebook, Youtube, online trading companies must be taxed – Deputy Finance Minister
The Deputy Finance Minister Dr Alex Ampaabeng, has proposed that online trading companies should be taxed to bolster the economy.
He noted that these companies, both local and international, generate significant revenue from their Ghanaian clients, which underscores the necessity for taxation.
In an interview with Bernard Avle on Channel One TV’s The Point of View, Dr Ampaabeng pointed out various potential revenue sources for Ghana, including online businesses and content creation companies.
He questioned why other national companies operating in Ghana are taxed, but social media platforms like Youtube and Facebook, which run numerous advertisements, are not included in the Ghanaian tax system.
According to him, these social media companies earn profits from the advertisements they display, and online trading companies also generate income from the sale of their products and services.
He mentioned online trading companies such as Jiji, Jumia, and Tonaton, which he believes surpass all physical marketplaces in Ghana in size.
According to him, “I can’t think of a country which has not gotten a digital service tax system of some sort, so Ghana is long overdue. Just to make an example so that people will appreciate where I’m coming from. Go to Youtube and play a video, within one or two minutes, you are going to watch about two, or three adverts.”
“What it tells you is that Facebook or Youtube is making profits right here in Ghana. Go to your Facebook account, and you are going to see a number of adverts on your right, left. What it is telling you is that Facebook is making profits right here in Ghana and not being taxed. Meanwhile, there are companies operating in Ghana, for jurisdiction reasons, of course, that are being taxed,” he said.
The Deputy Minister added that “So then, it comes to the question of the application of our tax laws. Revenues generated in Ghana are subject to taxes. We have Facebook, TikTok and all those players, these are digital platform owners.”
He stressed, “Then we have the digital or market players, here we are talking about individuals who are using the digital platforms. We have Jiji, Jumia, Tonaton, these combined, are bigger than all physical marketplaces in Ghana. And it tells you the volume of transactions, that are going on there.”
He expressed his hope that individuals earning online profits from Ghanaian residents would be taxed.
“There are conversations ongoing, I wouldn’t want to pre-empt anything, maybe in the future, it might not be anytime soon, what I would like to see, is a Ghana where people who are earning all forms of profits in the country are subject to taxes. People who are trading online to Ghanaian residents, people who are generating revenue from Ghana are allowed to pay taxes,” he noted.
Additionally, he proposed a collaboration with the government to curb cybercrime by registering and verifying these online trading companies.
“We can have a system where the government engages these operators, so individuals will submit their Ghana Card and are registered and verified,”he concluded.
Source: Citinewsroom.com
