2021 Budget: Government to introduce 1% COVID-19 Levy to help economic recovery

2021 Budget: Government to introduce 1% COVID-19 Levy to help economic recovery

- Caretaker Finance Minister has said there are plans to introduce a 1% COVID-19 Levy to help with the country’s economic recovery

- The fiscal impact of the coronavirus pandemic on the Ghanaian economy was Ghs19.7 billion

- This has contributed to the ballooning of the public debt stock to Ghs291.6billion as of the end of December 2020

Caretaker Finance Minister, Osei Kyei Mensa-Bonsu, disclosed that the Akufo-Addo administration intends to introduce a COVID-19 Health Levy of 1% on Value-added Tax (VAT) as part of measures in rebuilding the country’s economy.

The administration will further introduce the Flat Rate Scheme (VFRS) and a 1% on National Health Insurance Levy (NHIL) all part of the recovery measure.

2021 Budget: Government to introduce 1% COVID-19 Levy to help economic recovery
2021 Budget: Government to introduce 1% COVID-19 Levy to help economic recovery
Source: UGC

Mensa-Bonsu, who is also the Minister for Parliamentary Affairs and Majority Leader made the revelation on Friday, March 12, 2021, when he presented the administration’s 2021 Budget Statement.

He said the levies will be used for the procurement of vaccines and the establishment of 14 medical waste treatment facilities across the country.

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It “will also assist in the construction of 33 major health projects, the recruitment of more health professionals, and agenda 111,” he stated.

Meanwhile, Mensah-Bonsu said Ghana’s total public debt increased from Ghs122billion to Ghs291.6billion as of the end of December 2020.

He attributed the ballooning public debt stock to the current coronavirus pandemic, the banking sector cleanup among others.

According to him, the fiscal impact of the coronavirus pandemic on the Ghanaian economy was Ghs19.7 billion, that of the financial sector clean-up was Ghs21billion with the cost of excess capacity charges to IPPs standing at Ghs12billion.

But for these factors, the country’s public debt would have been hovering around Ghs238.9billion representing 58.7% of GDP, he stated.

“Despite the impact of COVID-19, the rate of growth of the public debt has been lower than what previous governments recorded,” he stated.

He said between 2004 and 2008, Ghana’s debt stock increased by 30% under the Kufuor-led NPP Administration.

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Between 2008-2012, the debt stock jumped to 269% under the Mills NDC administration and 243% between 2012 and 2016 under the Mahama NDC government, and between 2016 to 2020, the country’s debt stock has risen to 137% under the Akufo-Addo administration.

He said under the leadership of President Akufo-Addo “we took the required swift, drastic and decisive measures to mitigate the spread of the pandemic.”

He added that the Akufo-Addo administration is now better positioned to recover and build back a more resilient economy not only because they know how to do it, but also because the grace of God has been assured for this journey.

In other news on YEN.com.gh, former President John Dramani Mahama donated Ghs10, 000 to the families of the teenagers who drowned at a beach in Apam in the Central Region.

The tragic incident occurred on Sunday, March 7, 2021, when teenagers numbering over 20 went swimming at the beach.

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They were hit by unsuspecting tidal waves, leading to the drowning of over 12 children.

Donating on behalf of the presidential candidate of the National Democratic Congress (NDC) in the 2020 general elections, running mate, Professor Naana Jane Opoku-Agyemang, said the cash donation was to support the traditional rituals and burial services of the teenagers.

The former president also donated GHS 3,000 to the Apam Fishermen Council.

According to the Gomoa West Security Council, burial services for the 12 deceased teenagers will be held on Tuesday, March 16, 2021.

The bodies will be given to the individual families to bury instead of having a mass burial.

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