Ghana backs down on proposed condom tax
20 November 2013, 14:47
Accra - Ghana on Tuesday backed down on a proposed tax on
imported condoms after mooting increased levies on foreign-made goods as a way
of cutting government debt.
Finance Minister Seth Terkper made the announcement as he
presented the 2014 budget, backing parliament’s proposal last week to raise
overall sales tax by 2.5%.
“The preference for VAT [value added tax] is more
efficient,” he said.
Health campaigners had expressed reservations about the
proposal to impose a 1% tax on the prophylactics, saying it could dissuade
people from using them and harm HIV prevention initiatives.
The special tax would also have covered imports such as cutlasses,
which are widely used in agriculture in the west African country, and outboard
Ghana has been seeking to cut spending and raise revenue in
the wake of a year of grim economic news, including a ratings downgrade due to
concerns over the country’s ballooning deficit.
High potential for development
Since President John Dramani Mahama’s election victory last
December, Ghana has been struggling with a depreciating cedi and a rising
budget deficit caused by overspending in the run-up to the election.
The country in the past has posted high growth rates based
on exports of gold and cocoa as well as oil, which started production in 2010.
Terkper said the government aimed for economic growth of
8.0% in 2014, up from the 7.4% expected this year.
He also set a deficit target of 8.5% of Gross Domestic
Product (GDP) for the coming 12 months and expected a deficit of 10.2% this
year, down from 11.8% in 2012.
“Our country has high potential for development, underpinned
by a relatively well-diversified economy, multiple growth drivers, a sizeable
sub-regional market, hardworking and skilled citizens,” he added.
“We will continue to pursue the opportunities for prosperity
and wealth with additional bold initiatives.”
- Sapa - AFP