Damn critics and introduce indirect taxes to fund free SHS- Gatsi

As the finance minister prepares to read the 2018 budget tomorrow, one of the key areas most analysts would be looking out for is how government intends to sustain funding for the Free SHS policy.

The program is estimated to cost the state about 3.6 billion cedis annually.

So far, only 20 percent of that amount has been released to beneficiary schools since its implementation in September. Funding for the program is being sourced from revenue from the oil and gas sector.

But, economists including Dr. John Gatsi believe there should be a more sustainable source of funding for the program.

“Even though government clearly indicated that they want to reduce taxes and they’ve reduced some of them and we’ve seen the reflection in lower Tax to GDP ratio but I believe government should just forget about whatever we would say by aligning the Free SHS to a source of revenue that is related to taxation”, he suggested.

He went on to further explain that that “I think that the clearest sustainable roadmap for financing Free SHS is to introduce an Indirect Tax for it. We can find a way within the current indirect taxes to bring about one percent tax that should finance Free SHS. Like VAT. We can even go to the road fund and see what we can do about that so that is what should be done. That will be very important”.

So far, only 20 percent of 3.6 billion cedis allocated for the program has been released since its implementation in September 2017. The cost should go up next year as two batches of students would be provided for under the program unlike this year.

Local businesses which have been contracted to provide essential goods and services to beneficiary schools are doing it on credit basis.

Dr. Gatsi said this amounts to “engaging in a cycle of accumulation of arrears”.

Source: Ghana/Starrfmonline.com/103.5FM/Tawakalitu Braimah

 

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