Continuous fall in cedi could mop up tax cut gains—Kenneth Kwamina Thompson

Chief Executive Officer of Dalex Finance and Leasing Company Limited, Kenneth Kwamina Thompson, has indicated that the real impact of the numerous tax reliefs captured in the 2017 budget will be minimal if the government fails to quickly arrest the steady decline of the cedi.

According to him, the 2017 budget did not take into account the depreciation of the cedi–which has lost 19.37 percent of its value over the last nine months—from GH¢3.95 in June, 2016 to GH¢4.72 as at now.

“It will be prudent for government to quickly handle the cedi situation if the tax cuts could offer the intended relief to the business community,” he said at a post-budget seminar organised by the Ghana National Chamber of Commerce (GNCC) in Accra.

Mr. Thompson also said it will be tight for government to meet its budget targets for the year 2017 considering the tax cuts and the current business situation.

Finance Minister, Ken Ofori-Atta, last week announced a number of taxes that it intend to abolish in the short to medium term as government seeks to lighten the tax burden on private sector businesses.

Among the affected taxes include the 1percent Special Import Levy, the 17.5 percent VAT/NHIL on financial services, airlines tickets and selected imported medicines that are not produced locally as well as the 5percent VAT/NHIL on real estate sales.

But according to the Dalex boss, the impact of such interventions to the business environment will not be felt if the value of the cedi, which he said has been “depreciating like lead balloon”, is not shored up by government.

He urged government to increase export trade to raise more foreign exchange earnings to save the cedi from the slump.

He noted: “There is the need for guided investments to the agricultural sector, especially with adding value to our raw materials.”

The seminar on the theme: “Leveraging on government’s initiatives in the 2017 national budget for private sector growth”, brought together experts and the private business community to interrogate the policies contained in the budget to drive growth in the private sector.

President of the chamber, Nana Dr. Appiagyei Dankawoso I, said: “Through this seminar, we hope to make valuable inputs into the mid-year budget review.”

He said the chamber is repositioning itself to support government’s call for a paradigm shift towards agricultural transformations in the interest of sustained industrialisation

**Mpactglobal: Brilliance Gyekye

(The Business and Financial Times contributed to this story)

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