Policy think tank, IMANI Africa has described as misplaced, a suggestion by the Institute of Economic Affair (IEA) for the government to increase the 17.5 percent VAT by 1 percent to fund the Free SHS program.<\/p>\n
It said any increase in VAT will put undue pressure on Ghanaians.<\/p>\n
Many have given their suggestions as to how government can raise funds to pay for its flagship educational policy, Free SHS which government has budgeted some GH\u00a2400 million for.<\/p>\n
A Senior Adjunct Research Fellow of the IEA, Dr. Eric Osei-Assibey, at a post mid-year budget press conference, said \u201cjust as we did for the NHIS, increasing the VAT rate by say 1% and ring-fencing it for exclusive funding of the Free SHS will be very ideal. Domestic tax revenue provides a more stable and predictable source of financing expenditure for important public programmes such as free education.\u201d<\/p>\n
But the president of IMANI Africa, Franklin Cudjoe in an interview with Citi News<\/strong> said, he believed the government had alternative sources of raising money to fund the program other than increasing VAT.<\/p>\n He expressed shock at why the Dr. Osei-Assibey would make the suggestions despite indications that the government was committed to reducing taxes which it believes have been a burden on the citizenry.<\/p>\n \u201cI suspect they already have funds to make sure the plan succeeds. I\u2019m not sure taxation is one of them. For a government that is interested in reducing taxes, I would think that it may not be fair on them to be asked again to impose an additional 1% tax for something they already had a master plan for and ways to find sustainable resources to execute,\u201d Franklin Cudjoe said.<\/p>\n Debate over source of funding<\/strong><\/p>\n A debate over the source of funding for the Free SHS program became rife when\u00a0the Senior Minister, Yaw Osarfo Maafo\u00a0said in a Citi News<\/strong> interview that the government would use\u00a0money from the Heritage Fund to foot the bill.<\/p>\n His position was challenged by many people who said the Heritage fund was\u00a0meant to be reserved for the use by\u00a0future generations.<\/p>\n The Finance Minister, Ken Ofori-Atta subsequently announced that contrary to Mr. Osafo Maafo’s claims, the program will be funded with the\u00a0Annual Budget Funding Amount (ABFA).<\/p>\n He said it will cost government GH\u00a2400 million to implement the free SHS programme for just the 2017\/2018 academic year.<\/p>\n