Businesses must begin to tighten their belts as government plans to introduce new measures meant to arrest the stifling decline in revenue generation in the first quarter of the year.
Among other measures, government intends to impose new levies on imports, freeze the awards of new contracts and to clamp down on businesses which have escaped the tax nets.
The Minister of Finance Seth Terkper disclosed this in an interview on Joy FM’s Super Morning Show, Friday. He had only Thursday presented before Cabinet, the general overview of the economy in the first quarter of the year.
The Minister told sit-in host of the morning show Bernard Saibu that the measures about to be implemented should have been executed concurrently with the budget statement at the beginning of the year but said with the water, power crisis as well as the sharp decline of the cedi at the time, government did not want to impose additional burden on the businesses in the country.
After more than “six to nine months respite to businesses”, Seth Terkper said it is time to implement the necessary but difficult policies to ensure the economy gets on track.
The first quarter has been blighted with a shortfall in revenue due largely to unfulfilled promises by donor countries to pay grants; the payment of unplanned salary arrears to public sector workers as well as the purchase of crude oil to generate power in the country.
Whilst describing the situation as “challenging” the minister quickly dismissed assertions the country was broke.
He said the subsidies, part of which were removed on fuel prices, came in handy to shore up the increasing reduction in revenue for the period.
The Minister pointed out the need to review levies on imports and also employ a house cleaning exercise to check the “abuse of expenditures” by government agencies.
“Many of the measures will be temporary because we are not interested in Ghana being a high cost country for doing business,” he added.
He said government has appointed international experts to advise it on the floatation of the eurobonds, and are looking at the appropriate time to float the bonds.
He was hopeful that Ghana’s bonds are likely to be oversubscribed and the revenue that will be raised will be channeled into capital investment- ie infrastructural development as well as pay off some loans which have higher interest rates.
Terkper also chronicled several restructuring processes at the Ghana Revenue Authority all in an attempt to increase revenue generation for the country.