Federal Government to Form Independent Tax Advisory – Brytfmonline

Vice President Dr. Mahamudu Bawumia revealed that the government would soon form an independent Tax Council to oversee the implementation of fiscal policy and ensure that a single Treasury account to consolidate all Government funds at the Bank of Ghana are operational.

Expansionary fiscal policy involves government attempts to increase aggregate demand, either by increasing public spending or by reducing taxes and economic growth. Expansionary fiscal policy is most appropriate when an economy is in recession and it is below its potential GDP.

Addressing the first-ever Ghana-US business forum, Dr. Bawumia said: "We have been able to reduce and abolish about 15 different harmful taxes to make it easier households and individuals. "

Vice President Mahamudu Bawumia badured investors of the government's unwavering determination to maintain fiscal discipline to create a climate for business development.

An independent fiscal policy will improve the quality of budget discussions and promote greater transparency: Independent fiscal policy councils can play the same role as monetary policy committees, decide on deficits and the evolution of public debt.

In Ghana, an independent fiscal council can play a key role in badessing macroeconomic badumptions the budget and the estimation of the fiscal impact of the proposed measures.

In some countries, budget councils also play a "watchdog" role in monitoring compliance with budget rules. In addition, the forecasts produced by the budget councils can serve as a neutral benchmark for badessing the fiscal cost and the macroeconomic impact of policy proposals.

The mandate of the budget councils in some countries even allows a direct influence on the budget by specifying the technical inputs.

To be effective, fiscal policy advice must have a clear mandate, debt sustainability, so that they are free from the problem of temporal inconsistency that leads to a deficit bias.

In addition to fiscal rules, strengthening budget performance in Ghana will require taking control of the wage bill. Efforts should be made to ensure a clean pay system in the country. In addition, the wage setting process needs to be reconsidered for possible transition to multi-year agreements.

The incorporation of these recommendations into Ghana's current fiscal framework will contribute to the achievement of fiscal targets and help correct tax loopholes that have proved so costly to the performance of the economy as a whole. .