2022 budget will yield substantial new revenue - Ofori-Atta

The Minister for Finance, Ken Ofori-Atta, says the 2022 budget’s revenue measures, which include a new electronic transactions levy and intensification of tax compliance, will generate total revenue equivalent to 3 percent of GDP next year.

The minister, who was speaking at a post-budget workshop for Members of Parliament in Ho on Saturday, described the economy’s medium-term prospects as bright, with GDP growth projected to increase from 4.4 percent in 2021 to 5.8 percent in 2022 and an average of 5.6 percent from 2022–2025.

Last year, GDP growth fell to a record low of 0.4 percent on account of the Covid-19 crisis, with industrial activity and services bearing the brunt of the pandemic’s impact.

The Minister said inflation is expected to stay within the target band of 6–10 percent over the medium term, while the fiscal deficit is forecast to decline to 7.4 percent of GDP in 2022 and to fall further to less than 5 percent of GDP in 2024.

Ofori-Atta told MPs it was time for Ghana to build on the foundations laid before the pandemic.

“With the interventions, we offer through this budget, and with an understanding of burden sharing, we shall unleash a new cadre of entrepreneurs and nation builders.”

The highlights of the budget include a plan to create one million jobs within the next three years through YouStart, an initiative to support youth entrepreneurship. Under the initiative, the government will support young entrepreneurs to gain access to capital, training, technical skills and mentoring to enable them launch and operate their own businesses. An amount of GH¢1bn has been allocated to the initiative in the 2022 budget.

The budget also included a controversial new tax on electronic transactions, such as mobile money and international money transfers. This tax will be levied as a 1.75 percent charge on the value of electronic transactions exceeding GH¢100 to provide increased funding for road construction as well as other public programmes.

The budget also announced the abolition of road tolls on all public roads.