Budget Chaos: Ghana MPs Clash Over Controversial Tax Hikes

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The approval of Ghana’s 2024 budget has been thrown into disarray after the majority caucus in parliament staged a walkout on Thursday, November 30, 2023.

The budget, which was presented by Finance Minister Ken Ofori-Atta on November 17, 2023, has sparked heated debates and protests across the country over its proposed tax increases and levies on fuel, mobile money transactions, and electronic transactions.

The opposition National Democratic Congress (NDC) has described the budget as “killer”, “anti-poor”, and “unconstitutional”, and has vowed to reject it in parliament.

The ruling New Patriotic Party (NPP), on the other hand, has defended the budget as “bold”, “visionary”, and “transformational”, and has accused the NDC of being “irresponsible” and “unpatriotic”.

The drama unfolded on Thursday when the Speaker of Parliament, Alban Sumana Kingsford Bagbin, who is a member of the NDC, put the motion for the approval of the budget to a voice vote and declared that the “ayes” by the NPP had carried the motion.

However, the NDC challenged the Speaker’s ruling and demanded a headcount or division to determine the outcome of the vote, citing Order 113 (2) of the Standing Orders of Parliament.

The Speaker, adhering to the NDC’s request, instructed the Clerks at the Table to conduct the headcount. He also informed the House that each MP’s name would be called out for them to stand up and be counted.

This did not go down well with the NPP, who argued that the Speaker had already declared the “ayes” in favour of the motion and should stand by his ruling. They also feared a potential defeat or the loss of the motion, given the absence of three NPP MPs, who were reportedly on official duties outside the country.

The NPP then decided to boycott the voting process and walked out of the Chamber amidst booing from the NDC MPs.

The walkout has disrupted the proceedings and left the fate of the budget hanging in the balance. It is unclear when the parliament will resume the approval process or whether the Speaker will reconvene the House for another vote.

The budget impasse has also raised concerns about the stability of Ghana’s democracy and economy, which have been praised as models in the West African region.

According to the World Bank, Ghana’s economy is expected to grow by 4.6% in 2023, after contracting by 0.4% in 2020 due to the impact of the COVID-19 pandemic. However, the country also faces high public debt, fiscal deficits, inflation, and unemployment challenges.

The budget aims to address these challenges by mobilizing more domestic revenue, enhancing social protection, promoting digitalization, and supporting key sectors such as agriculture, industry, and infrastructure.

However, the budget also faces strong opposition from various stakeholders, including civil society groups, trade unions, business associations, and religious leaders, who have expressed their dissatisfaction with the proposed tax measures and called for their withdrawal or review.

Some analysts have also questioned the legality and feasibility of the budget, especially the E-Levy, which seeks to impose a 1.75% charge on all electronic transactions above 100 Ghana cedis (about $17).

They argue that the E-Levy violates the constitution, which requires that any tax imposed by the government must be approved by parliament. They also contend that the E-Levy will discourage the use of digital platforms, increase the cost of living, and worsen the plight of the poor and vulnerable.

The government, however, maintains that the E-Levy is necessary to expand the tax base, reduce the informal sector, and fund the government’s flagship programmes, such as the Free Senior High School, the One District One Factory, and the Planting for Food and Jobs.

The government has also indicated its willingness to engage with the stakeholders and parliament to reach a consensus on the budget and ensure its smooth implementation.

The budget standoff has exposed the deep divisions and tensions in Ghana’s parliament, which has a hung composition, with both the NPP and the NDC having 137 seats each, and one independent MP, who usually sides with the NPP.

The situation also reflects the polarized and competitive nature of Ghana’s politics, which has been dominated by the two parties since the return to multiparty democracy in 1992.

Despite the challenges, many observers and citizens remain hopeful that Ghana’s parliament will overcome the impasse and approve a budget that will serve the best interests of the nation and its people.

Source: Graphic Online