Wasting $1.4m Daily Is Criminal
Finance Minister, Ken Ofori-Atta, on Monday presented his 2019 mid-year budget statement to Parliament, and sought approval to spend some GH¢6.37 billion over and above the approved GH¢78 billion for the year. He also proposed an upward adjustment in the ‘talk tax’, from 6% to 9%.
According to him, the essence of increasing the Communication Service Tax is to develop a foundation for the creation of a viable technology ecosystem in the country. Overall, the statement he read intended to address some of the major concerns raised by industry and the citizenry.
All said and done, two of the proposals in the statement that seem to have touched more on the lives of millions of Ghanaians are the effort to, as it were, stop the bleeding of the economy, and also government’s response to the concerns of the masses.
First was the virtual declaration of a State of Emergency in the energy sector, for which the minister said drastic measures would be taken going forward.
He said Ghana’s installed energy capacity of 5,083 megawatts (MW) was almost double its peak demand of around 2,700MW, and lamented that a whopping 2,300MW of the installed capacity had been contracted on a take-or-pay basis, meaning we were contractually obliged to pay for any excess capacity we did not consume.
By this, government had been wasting over $500 million (GH¢2.5 billion) annually for power it did not need. Thankfully, the minister said henceforth, take-or-pay had become history, and would be replaced by a take-and-pay policy.
Going by the figures, THE NEW PUBLISHER is alarmed at the fact that, poor as we claim we are, the country had for some years now been wasting nearly $1.4 million every day. This cannot be allowed to continue.
To us, not only is the decision to cancel the take-or-pay deal a welcome one. We also think that those who signed the deal in the first place must be investigated and prosecuted for willfully causing financial loss to the state. That is the only way decision makers in this country will sit up.
Secondly, the Minister said government had withdrawn the controversial Luxury Vehicle Tax it introduced last year.
In the levy, vehicles with engine capacities of 3.0 – 3.5 litres were to pay an annual tax of GH¢1,000; those with capacities of 3.6 – 4.0 litres to pay GH¢1,500 annually while 4.1 litres and above were to pay an annual tax of GH¢2000.
The levy had been met with opposition from many stakeholders, and even though government had projected a GH¢136.53 million, revenue collected yielded only GH¢30.19 million in the first quarter.
In a banter, while the opposition in parliament thinks the tax was withdrawn because government had failed in its expectations, the minister said government only wanted to show it was a listening one.
Whichever way, THE NEW PUBLISHER thinks the bold decision to withdraw the tax is the best thing to do. We, therefore, congratulate the minister for eating a humble pie. This is no weakness.
After all, our elders say ‘It takes a lot of bravery for one to admit he is a coward’.