The government’s decision to maintain current tax levels in the Mid-Year Budget Review offers some relief to businesses and individuals, according to Deloitte Ghana’s analysis of the 2024 Mid-Year Review Budget.
The audit and tax services firm warns that further tax increases could negatively impact private sector productivity, especially given the current challenges of high inflation and exchange rate depreciation.
The analysis highlights that debt restructuring and the International Monetary Fund programme have significantly reduced the country’s interest payments from GH₵55.9 billion (previously the largest expenditure item) to GH₵48.0 billion (now the second-largest).
Deloitte believes this reduction creates the fiscal space needed to implement key government programmes to revitalise and transform the economy.
The Government of Ghana has also projected an increase in capital expenditure from 2.5% of GDP in 2023 to 2.8% in 2024.
Deloitte notes that this forecast suggests a strong emphasis on improving social infrastructure and other essential services, which could drive robust economic performance in the medium to long term.
The firm further pointed out that the reduction in total expenditure in the 2024 mid-year budget review is largely due to savings on interest payments, which have decreased as a result of the completion of external debt restructuring, including bilateral, multilateral, and Eurobond debts.
Source: Adomonline