Highlights of 2023 budget presentation by finance minister

The Minister of Finance, Ken Ofori-Atta has appeared before parliament to fulfill his constitutional mandate by presenting the government budget to the House.

The presentation was in accordance with Article 179 of the 1992 Constitution and section 21 of the Public Financial Management Act, 2016 (Act 921).

GhanaWeb in this article highlights key measures announced in 2023 budget by the finance minister;

E-Levy rate reviewed from 1.5% to 1.0%, GH¢100 daily threshold removed

Finance Minister, Ken Ofori-Atta has announced a review in the rate for the Electronic Transfer Levy (E-Levy) from 1.5 percent to 1.0 percent.

According to him, the decision forms part of government initiatives to improve the country’s domestic revenue generation efforts under a seven-point agenda.

He added that the tax measure imposed on electronic transfers will also see the removal of the GH¢100 daily threshold which was in place since its implementation in May this year.

“Mr. Speaker, we will undertake the following actions, initiatives, and interventions under the seven-point agenda. To aggressively mobilize domestic revenue, we will among others: Increase the VAT rate by 2.5 percent to directly support our roads and digitalization agenda; Fast-track the implementation of the Unified Property Rate Platform programme in 2023; and Review the E-Levy Act and more specifically, reduce the headline rate from 1.5% to one percent (1%) of the transaction value as well as the removal of the daily threshold,” he said.

Government freezes employment for civil and public servants for 2023 financial year

The government has frozen the hiring of public and civil servants for the 2023 financial year.

According to the Finance Minister, Ken Ofori-Atta, this is part of expenditure cut measures being adopted by government to address the current economic challenges.

“A hiring freeze for civil and public servants. No new government agencies shall be established in 2023,” Ken Ofori-Atta said.

Government to cut imports by 45%

The Government of Ghana also indicated that in 2023 it will target some specific products for import substitution through support to the private sector.

According to Ofori-Atta, the targeted products form about 45% of the value of the country’s annual imports, resulting in pressure on the cedi.

“Mr. Speaker, as I have already indicated, Ghana’s heavy dependence on imports places tremendous pressure on the Cedi, creating an unfavourable balance of payments position. On average, Ghana’s import bill exceeds US$10 billion annually and is accounted for by a diverse range of items that include iron, steel, aluminium, sugar, rice, fish, poultry, palm oil, cement, fertilizers, pharmaceuticals, Toilet roll, toothpick, fruit juices, etc. ,” he said.

Government increases Value Added Tax by 2.5%

Government during the presentation announced an increment in Value Added Tax (VAT) by 2.5 percent for consumers of goods and services.

The move is expected to improve government’s domestic revenue measures while seeking to reach an IMF deal to restore macroeconomic stability.

“Mr. Speaker, we will undertake the following actions, initiatives, and interventions under the seven-point agenda. To aggressively mobilize domestic revenue, we will among others: Increase the VAT rate by 2.5 percent to directly support our roads and digitalization agenda; Fast-track the implementation of the Unified Property Rate Platform programme in 2023; and Review the E-Levy Act and more specifically, reduce the headline rate from 1.5% to one percent (1%) of the transaction value as well as the removal of the daily threshold,” he said.

Tema-Motorway to get five lanes each, Tetteh Quarshie interchange to be remodelled

Government also announced it is seeking to secure funds from Ghana Infrastructure Investment(GIIF) for a 27.7 km of the Accra-Tema motorway and extension project.

According to Ken Ofori-Atta, the project, when approved, will provide the Tema-Motorway with five lanes on each side of the stretch.

Speaking in parliament, he indicated that aside the Tema-Motorway lanes, the government will remodel the Tetteh Quarshie interchange and there will be a reconstruction of the Apenkwa interchange and a new interchange at the Fiesta Royale crossroads and Neoplan area.

“Mr. Speaker, Government is pursuing the strategic decision to procure the 27.7km of the Accra-Tema Motorway and Extensions Project through the Ghana Infrastructure Investment Fund (GIIF). A PPP Concession Agreement backed by an appropriate toll arrangement will be presented to Parliament for approval to facilitate its execution. Provision has also been made in the 2023 and the Medium-Term Budget for the Equity and Viability Gap Funding required by a GIIF Special Purpose Vehicle (SPV) to enable the project to start in earnest in 2023. The project will be delivered in phases.

“Mr. Speaker, the iconic nature of the project is such that when completed, there will be five lanes each on both sides of the main Accra-Tema Motorway stretch, and six lanes each on the Tetteh Quarshie – Apenkwa stretch of the road. The project will include the remodeling of Tetteh Quarshie Interchange, the reconstruction of the Apenkwa Interchange and the construction of new interchanges at the Fiesta Royale cross roads and Neoplan area,” he said.

Government bans the use of V8, V6 vehicles except for cross-country travel

The use of V8 and V6 vehicles by government officials will be stopped beginning January 2023 as a measure to reduce the country’s expenditure, Finance Minister, Ken Ofori-Atta has said.

The Finance Minister made the revelation when he presented the 2023 budget in parliament on November 24, 2022.

He said: “A ban on the use of V8s/V6s or its equivalent except for cross-country travel. All government vehicles would be registered with GV green number plates from January 2023.”

He also said, “there will be a limited budgetary allocation for the purchase of vehicles. For the avoidance of doubt, the purchase of new vehicles shall be restricted to locally assembled vehicles.”

“Only essential official foreign travel across government including SOEs shall be allowed. No official foreign travel shall be allowed for board members…Accordingly, all government institutions should submit a travel plan for the year 2023 in mid-December of all expected travels to the Chief of Staff,” he added.