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
motors.
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
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