Discover 16 highlights from the 2022 budget statement

Finance Minister Ken Ofori-Atta presented the government’s 2022 budget report and economic policy to Parliament.

The budget submission on Wednesday, November 17, 2021 was in accordance with article 179 of the 1992 constitution.

In the presentation, he said that capital spending, funding of major government flagship programs, payroll and interest payments were identified as the main drivers of spending growth.

The minister also announced new taxes and other interventions to achieve the domestic revenue target.
Here are some highlights:

1. Government services will see an upward adjustment of at least 15%

One of the government’s policy measures is a “revision of fees and charges with an average increase of at least 15% in 2022 and thereafter subject to automatic annual adjustments based on the average inflation rate as published. by the Ghana Statistical Service, but with prior consent. from the Minister of Finance. Royalties and charges should, however, be subject to a general review every five years. The effective date of implementation is January 1, 2022 ”, revealed Mr. Ofori-Atta.

2. Removal of tolls on all public roads in the country

“To meet these challenges, the government has abolished all tolls on public roads and bridges. This takes effect immediately after the approval of the budget, ”announced the Minister.

3. A fee of 1.75% on all electronic transactions has been introduced

“After much deliberation, the government decided to impose a tax on all electronic transactions to widen the tax net and rope in the informal sector. This will be known as the “Electronic Transaction Levy or E-Levy,” said Ken Ofori-Atta.

He said part of the proceeds will go to entrepreneurship and job creation.

4. One million jobs to be created under a new initiative called “YouStart”, with seed capital of GHS 1 billion

“The YouStart initiative which proposes to use 1 billion GH ¢ each year to catalyze an ecosystem to create 1 million jobs and in partnership with financial institutions and development partners, raise an additional 2 billion cedis”, he declared.

5. Revenue and expenditure targets. The government has also targeted an overall growth target (GDP) for the year 2022 at 5.8%.

The government aims to spend an estimate of GHS 137.5 billion, while the GHS 100.5 billion is to be increased as total revenue for 2022.

“Total revenue and subsidies and total expenditure, the 2022 budget operations will result in an overall budget deficit of GH ¢ 37.0 12 billion, or the equivalent of 7.4% of GDP,” the minister said.

6. Less than 10 percent of Ghana’s 30.8 million people pay direct taxes

“Only 2,364,348 bear the burden of the entire population as taxpayers in August 2021,” said Ken Ofori-Atta.

7. Introduction of a common platform for the administration of real estate prices in order to improve the collection of real estate prices

“The government, through the Ghana Revenue Authority, will assist MMDAs from January 2022 to implement a common platform for property rate administration to improve property rate collection and accountability. », Underlined Ken Ofori-Atta.

8. COVID-19 has increased public debt
“The situation was made worse by the sharp drop in revenue collected last year. Total revenues in 2020 fell by GH? 11.93 billion, equivalent to 3.1% of GDP, while total expenditure increased by GH? 14.08 billion, equivalent to 3.7% of GDP.

9. Examination of benchmarks

“After two and a half years of operation, the temporary reference (discount) policy on imports introduced as a palliative measure has been revised to make it more effective and better targeted. This is in line with government policy to promote local industry
and improve foreign exchange earnings, ”the Minister stressed.

10. Development Bank Ghana acquires a license from the Central Bank

“Sir. Mr. Chairman, the government is pleased to announce the successful establishment and operationalization of the Development Bank of Ghana (DBG). DBG has received its operational license from the Bank of Ghana. The Central Bank has also performed due diligence and approved the board of directors and key management staff of DBG. DBG will support the private sector to ease the constraints of long term credit for growth and expansion “, a- he announced.

11. Reduction of withholding tax on the sale of raw gold

“For artisanal gold mining, reduce the withholding tax of 3.0% on the sale of raw gold by artisanal miners to 1.5% as of January 1, 2022”, indicated the Minister .

12. Tax regime amended in the Income Tax Act

“Implement a modified tax regime in the income tax law by raising the current turnover threshold of 200,000 GH?” to 500,000 GH? for
business income of the self-employed, ”he announced.

13. Revision of the VAT flat rate system (VFRS)

“There will be a revision of the VRFS by applying the standard VAT rate to all businesses except retailers with a turnover threshold between
GH ¢ 200,000-GH ¢ 500,000 where VFRS will apply. The rationale is to address the inequalities that national producers of local substitutes face
vis-à-vis importers of similar products ”, indicated the Minister.

14. Reduction of the electricity tariff

“The government has made deals with some IPPs to convert power plants to toll structures, switch to natural gas and reduce tariffs. This is expected to result in considerable savings for the government and the nation over the remaining life of the PPAs. These savings are expected to come from a combination of reduced capacity and energy loads across the portfolio, ”said Ofori-Atta.

15. Budget labeled “Budget Agyenkwa”

“We would like to thank this august Maison for the continued support we have received over the years. We are counting on you for approval and support to implement our country’s transformation budget. Mr. President, I present to you the AGYANKWA Budget ”, he announced.

16. A two-year tax break for textile manufacturers.

Dorothy H. Lewis