Accra, Ghana - Ghana's Finance Minister, Seth Terkper, on Tuesday said the government plans to cut the huge budget deficit for 2012 said to be about 12.1 per cent of Gross Domestic Product (GDP).
He said: “We are resolved to tackle the main fiscal challenge which is the budget deficit; the sources of the excess deficit of about 6% are known and quantifiable.”
Presenting the 2013 budget in Parliament on Tuesday, Mr Terkper stated that the sources of the deficit were “shortfalls in corporate income taxes, notably from the petroleum sector of about 708 million Ghana cedis, or 1% of GDP, shortfalls in grants from development partners amounting to about 389.4 million Ghana cedis, or 0.5% of GDP and the implementation of the Single Spine Salary Structure for public sector workers, which has gone in excess of about 1.91 billion Ghana cedis, or 2.7%of GDP.' (US$1=1.9 Ghana cedis.)
The minister said the government would cut the deficit to about 9% through enhanced tax revenues and expenditure controls.
The budget targets 8% growth and an end-of-year inflation of 9% fir 2013.
Mr Terkper announced increases in taxes saying the country’s tax regime had remained largely unchanged for a very long time even though the economic conditions had changed.
He said the increases would not only help the government to expand its social intervention programmes but ensure that 'the taxes aligned perfectly with existing trends in revenue mobilisation'.