Covid-19 health levy not to recover cost of 2020 water and electricity freebies – Oppong Nkrumah

The Minister of Information, Kojo Oppong Nkrumah has dismissed claims that the proposed Covid-19 health levy is a ploy by government to recover the cost of free water and electricity enjoyed by Ghanaians in 2020.

Speaking at a press briefing to update Ghanaians on the status of the country’s fight against the pandemic, Mr. Oppong Nkrumah said the 2021 Budget Statement never indicated that the purpose of the levy was to pay for the freebies.

Referring to page 58 of the Budget Statement, he stated: “…you never see it anywhere that you have to pay for the free water and free electricity from 2020”.

“It (the Budget Statement) outlines what government has done so far in connection with the Covid programme and then it goes on to make the point that ‘To provide the requisite resources to sustain the implementation of these measures, government is proposing the introduction of a Covid-19 Health Levy of 1% increase in the national health insurance levy and 1% point increase in the VAT flat rate’”.

His statement follows backlash from the general public and some members of the opposition National Democratic Congress (NDC) that government has not been transparent in its dealings.

During an interview with Evans Mensah on Joy News’ PM Express, Mr. Oppong Nkrumah had stated that, the freebies were not free for government and therefore must be paid for.

“When we say free electricity it doesn’t mean that the IPP producer is also going to say because the President has said free electricity I won’t charge for it. But that GHS19 billion has to be paid for at some point. The liabilities we have incurred have to be paid for.”

However, clarifying the confusion on the matter, Mr Oppong Nkrumah stated at the press briefing that the claim that “government says you (referring to Ghanaians) have to pay for free electricity and water” is false.

Mr Kojo Oppong Nkrumah also used the opportunity to clarify reports on the expenditure made by government during the pandemic.

Quoting paragraph 2 of the Financial Statement, he stated that 17 billion reflects expenditure on two items under the Covid-19 related expenditures.

“As at the end of December 2020, Ghana incurred a revenue shortfall of 11 billion and expenditure increase of 14 billion,” paragraph 3 stated.

The Ofoase-Ayirebi MP further stated that the new taxes are being introduced to aid in the recovery of the economy. He cited countries like the United Kingdom, the United States of America, Saudi Arabia, Indonesia who have instituted some austerity measures post-Covid-19.

“For example the UK is hiking corporate tax to about 25% to support their response [Covid] programme…In Indonesia, they’ve done a 10% VAT on sales by technology firms. And then in Argentina they’ve passed a new tax on the wealthiest people to pay for medical supplies and relief measures.

“In Saudi Arabia, they are considering tripling their Value Added Tax as part of austerity measures following the Covid response programme. In the US, they are considering some of the major hikes since 1993. So we are not alone in this situation,” he concluded.

He, therefore, called on the general public to support the measures outlined in the 2021 economic policy while urging the media to correct misrepresentations on the post-Covid-19 recovery programs.

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