A Professor at the University of Ghana Business School, Lord Mensah has said that it is extremely dangerous for the government to spend in areas that do not generate revenue.
He indicated that one of the reasons the country ends up going to the International Monetary Fund (IMF) is due to spending on areas that do not build up into the revenue generation for the government.
Contributing to a discussion on the passage of the tree revenue bills, on the Big Issue on TV3 Monday April 3, Prof Mensah said “if you read the budget and you create a deficit, definitely you must finance the deficit.
“I always say that business is in the deficit but if you don’t take care and you continue to project yourself by reading a budget which has a huge deficit you will end up bringing the economy to a halt and especially when you are spending in areas that are not building up into revenue generation then trust me, you will be running your economy and you will end up with IMF.”
For his part, a former Acting Chief Executive Officer of the National Pensions Regulatory Authority (NPRA) Sam Pee Yalley said that the Akufo-Addo administration deceived Ghanaians to move the economy from taxation to production.
Since the assumption of office of the government, the President has introduced taxes upon taxes, he said.
The former High Commissioner to India said on the same show that “We [NDC] have been very loud about their deception. If you deceive Ghanaians that you are going to run an economy from taxation to production and then we are not seeing the production, it is more and more taxes and we celebrate that we have imposed more taxes on Ghanaians.
“A government is put in place to resolve problems not to compound problems.”
Parliament by 137-136 majority decision passed the three revenue bills on Friday, March 31.
The bills are the Income Tax Amendment Bill, Excise Duty Amendment Bill, and Growth and Sustainability Amendment Bill.
The government is seeking to generate approximately GH¢4 billion per year to supplement domestic revenue.
Finance Minister Ken Ofori-Atta earlier appealed to Parliament to pass the three bills to help in facilitating the deal that Ghana is seeking under the International Monetary Fund (IMF).
Speaking at a forum in Accra on Thursday, March 30, he said “Our Parliament, in the national interest, will pass these bills before the close of the week and it will not be seen as disloyalty to anyone party. So if I may be permitted to use the word fellow Ghanaians, we are a blessed nation…I am more convinced now than ever that we are a blessed nation.
“A week ago I was in China to meet their Finance Minister and various institutions about support for an IMF programme and the Lord certainly went ahead of us.
“Ghana is a big country, the Minister of Finance is a big man but the Minister of Finance of China gave us the Ghana delegation almost an hour and a half conversation. Not only did he do that he also called the chairman of the Exim Bank of China to join him to talk through these ways in which they can facilitate to make sure we get our IMF transaction.
“So indeed America is ready for us, we saw Kamala Harris here, Germany has been here, the Europeans are behind us, the Fund is behind us. It is left with our Parliament. It can’t be that we shoot ourselves in the foot. Let us rally behind our Parliamentarians.”
By Laud Nartey|3news.com|Ghana