Former Finance Minister Seth Terkper has described the 2021 budget as an austere budget.
According to him, the budget is a reflection of the declining revenue generation by the government.
“The 2021 budget is an austere budget and it’s chickens coming home to roost. We have been going down on revenue generation by 5 percentage points from 2017 till now. We don’t have room and we should be cautious on the expenditure side. That’s the reality.
“We set out in 2020 to bring in GHC 67bn. We revised it to GHC53bn so if GRA is able to meet the GHC53bn, they have met the revised target and not the original target,” he told Francis Abban during a discussion on the 2021 budget statement Tuesday.
The government in the budget statement introduced new taxes, a situation that has stirred up intense debate around the country.
The Energy Sector Recovery Levy, Covid-19 Health Levy, and Sanitation and Pollution Levy are some of the revenue generation measures announced by the Caretaker Finance Minister Osei Kyei-Mensah-Bonsu during the budget reading.
Meanwhile, government has called on Ghanaians for support in order to succeed with its post-COVID-19 recovery plans.
According to Information Minister Kojo Oppong Nkrumah, the introduction of fresh tax measures by government is necessary to revamp and salvage the economy from the claws of the coronavirus pandemic.
“It is fair for people to focus on the tax measures and ask questions about it. But this budget does not only introduce these revenue measures. The revenue measures are necessary because we are at a fiscal deficit of 11 to almost 12%. Debt to GDP is around 70%, in nominal terms 291 billion cedis.
“The option any government will have under these circumstances are to find creative ways of raising revenue and gradually bring back the debt and deficit to a more responsible position. There are a multiplicity of reasons for which we are here. Key among them is the COVID challenges that we are in now. If you look at what COVID has done, it has moved us from 5% to 11% and extra 6% of GDP,” he told Joy News on Monday.