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Business News of 2014-10-16
The Finance Ministry has given indications that government is to maximise tax collection from property rates and rent income to boost its revenue in 2015.
Dr. Edward Larbi-Siaw, Tax Policy Advisor of the Ministry of Finance said: “The whole programme (street-naming) is to be followed with the proper valuation of properties. Most properties have not been valued for more than 20 years.
“Property and rent taxes are areas where study progress can be made. We don’t want to increase taxes but rather broaden the base. There are several people who have done studies and are coming to tell us that there is a lot of revenue to gather from rent tax,” he said.
Under the National Street-Naming and Property-Addressing Policy and the National Operational Guidelines on Street-Naming and Property-Addressing System, all streets and houses were expected to be named and numbered respectively by the end of September 2014.
In the Accra Metropolis, at least 4,000 streets have been digitised and assigned names under the street-naming and property-addressing project. The project has achieved varying levels of success in various parts of the country.
This project, Dr. Siaw believes, will provide the requisite data for policymakers to review the current low property rates and rent tax.
The tax expert further explained to the B&FT: “In line with the street-naming and the cadastral being assisted by the Canadian government, if you have a full map of Accra properly named and the properties valued, then we have a basis of rate change”.
Major towns and cities in the country have experienced a boom in commercial high-rise buildings and residential properties over the past decade. However, these properties are not taxed properly, as the property rates have not been reviewed for decades.
“When you walk around Accra and other parts of Ghana, with all the new high rise buildings coming up, we have not been able to tax them properly,” the tax expert said.
Finance Minister, Seth Terkper in July announced a cut in government’s 2014 economic growth target and forecasted a wider budget deficit and higher inflation -- due largely to falling revenue inflow, depreciation of the cedi, and a decline in the world market prices of key foreign exchange earners gold and cocoa.
The country’s fiscal deficit is projected at GH¢8.9million, equivalent to 10.2 percent of GDP. The projected rise in the fiscal deficit is mainly as a result of the projected shortfall in revenue, coupled with projected higher spending on wages and salaries and high interest costs
Budget deficit is also projected to hit 8.8percent of Gross Domestic Product (GDP) -- up from an initial 8.5 percent.
An overall GDP growth, including oil, of 7.1 percent is projected with an end-year inflation of 15 percent.
The Ghana Revenue Authority (GRA) in 2013 failed to meet its revenue target of GH¢15.61 billion. It reported a revenue of GH¢12.96billion, which represented a shortfall of some GH¢2.65billion.
Balancing government’s revenue and expenditure has been the theme song during initial negotiations between the government and IMF officials.
Expenditure on wages and salaries from January to May 2014 stood at GH¢3.8million, higher than the budget target of GH¢3.7million.The expenditure on wages and salaries for the first five months of the year is also 26.2 percent higher than the outturn for the same period in 2013.
Government further spent another GH¢348.5million on the payment of wage arrears as at July.
The Finance Ministry, while admitting this challenge, says it is already working to address these impediments.
The 2015 budget and economic statement of government, due to be presented in November, is expected to reflect the fiscal remedy postulated by the International Monetary Fund (IMF).
Helen Mona Quartey, Deputy Finance Minister, at a recent stakeholders forum to solicit inputs for the 2015 budget said: “Even as we go through the negotiations and discussions, we will have a fairly good idea of the measures that they would like to see us implement and the social protection measure we will have to put in place. We will synchronise this with our home-grown policy and our medium-term plan”.
She was optimistic that the budget will be presented in November. “We will be able to present the budget in November. If things delay, we will still do our budget and we will get the time to add-on what we need to add on. It would be nice if we could have it all together by the end of the year; if it’s not, we still have another quarter to fix it,” Mrs. Quartey said.
Business News of 2014-10-16
The Finance Ministry has given indications that government is to maximise tax collection from property rates and rent income to boost its revenue in 2015.
Dr. Edward Larbi-Siaw, Tax Policy Advisor of the Ministry of Finance said: “The whole programme (street-naming) is to be followed with the proper valuation of properties. Most properties have not been valued for more than 20 years.
“Property and rent taxes are areas where study progress can be made. We don’t want to increase taxes but rather broaden the base. There are several people who have done studies and are coming to tell us that there is a lot of revenue to gather from rent tax,” he said.
Under the National Street-Naming and Property-Addressing Policy and the National Operational Guidelines on Street-Naming and Property-Addressing System, all streets and houses were expected to be named and numbered respectively by the end of September 2014.
In the Accra Metropolis, at least 4,000 streets have been digitised and assigned names under the street-naming and property-addressing project. The project has achieved varying levels of success in various parts of the country.
This project, Dr. Siaw believes, will provide the requisite data for policymakers to review the current low property rates and rent tax.
The tax expert further explained to the B&FT: “In line with the street-naming and the cadastral being assisted by the Canadian government, if you have a full map of Accra properly named and the properties valued, then we have a basis of rate change”.
Major towns and cities in the country have experienced a boom in commercial high-rise buildings and residential properties over the past decade. However, these properties are not taxed properly, as the property rates have not been reviewed for decades.
“When you walk around Accra and other parts of Ghana, with all the new high rise buildings coming up, we have not been able to tax them properly,” the tax expert said.
Finance Minister, Seth Terkper in July announced a cut in government’s 2014 economic growth target and forecasted a wider budget deficit and higher inflation -- due largely to falling revenue inflow, depreciation of the cedi, and a decline in the world market prices of key foreign exchange earners gold and cocoa.
The country’s fiscal deficit is projected at GH¢8.9million, equivalent to 10.2 percent of GDP. The projected rise in the fiscal deficit is mainly as a result of the projected shortfall in revenue, coupled with projected higher spending on wages and salaries and high interest costs
Budget deficit is also projected to hit 8.8percent of Gross Domestic Product (GDP) -- up from an initial 8.5 percent.
An overall GDP growth, including oil, of 7.1 percent is projected with an end-year inflation of 15 percent.
The Ghana Revenue Authority (GRA) in 2013 failed to meet its revenue target of GH¢15.61 billion. It reported a revenue of GH¢12.96billion, which represented a shortfall of some GH¢2.65billion.
Balancing government’s revenue and expenditure has been the theme song during initial negotiations between the government and IMF officials.
Expenditure on wages and salaries from January to May 2014 stood at GH¢3.8million, higher than the budget target of GH¢3.7million.The expenditure on wages and salaries for the first five months of the year is also 26.2 percent higher than the outturn for the same period in 2013.
Government further spent another GH¢348.5million on the payment of wage arrears as at July.
The Finance Ministry, while admitting this challenge, says it is already working to address these impediments.
The 2015 budget and economic statement of government, due to be presented in November, is expected to reflect the fiscal remedy postulated by the International Monetary Fund (IMF).
Helen Mona Quartey, Deputy Finance Minister, at a recent stakeholders forum to solicit inputs for the 2015 budget said: “Even as we go through the negotiations and discussions, we will have a fairly good idea of the measures that they would like to see us implement and the social protection measure we will have to put in place. We will synchronise this with our home-grown policy and our medium-term plan”.
She was optimistic that the budget will be presented in November. “We will be able to present the budget in November. If things delay, we will still do our budget and we will get the time to add-on what we need to add on. It would be nice if we could have it all together by the end of the year; if it’s not, we still have another quarter to fix it,” Mrs. Quartey said.
