Oil prices Govt to maintain temporary taxes as revenue situation worsens

Seth Terkper has revealed that, with the falling oil prices, many investors are running to Gold, which is seeing the increase in the international prices for Gold

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Finance Minister, Seth Terkper play

Finance Minister, Seth Terkper

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Current happenings on the international economic front are having some telling effects on Ghana's economy in terms of revenue generation.  This  is according to the Ministry of Finance

The latest are China's devaluation of their local currency the Yuan, prices of fuel as well as Gold prices.

The minister of finance has however maintained that these current economic events notwithstanding, Government will not increase taxes, neither will government cut expenditure but will maintain temporary taxes government had planned to remove.

The minister of finance said this in an update to the press this afternoon on how the economy is currently faring under such major revenue cuts.

" The situation may be dire, but it is not beyond the control of government. Government will not have to increase taxes or cut expenditure. This is because government will fall on the temporary taxes it levied  in 2013, like the fiscal stabilisation  levy, and temporary import  duties. We had wanted to remove these temporary taxes but we will not any longer."

Seth Terkper again emphasized the need for all government Ministries and Agencies to spend within their budget limits in order to maintain the integrity on the national   budget and help the government ride the storm.

He added that the current conditions have vindicated government for the strong decisions it took in relation to subsidies and the wage bill earlier this year to cut expenditure.

" The measures have helped us, even in the significant drop in crude oil prices. Excess expenditure in relation to the Single Spine Pay Policy, and subsidies were problems for us. But now that we have been able to consolidate all of them, we should be fine. You will agree with me that if you forecast $99 per barrel for oil , and $4.8 billion for the year and you are doing only close to $2 billion in petroleum revenue, it is not an easy situation to deal with."

Seth Terkper has revealed that, with the falling oil prices, many investors are running to Gold, which is seeing the increase in the international prices for Gold. This according to him, will enable the country make up some of the revenue it is losing from falling oil prices on the international maket.

The finance minister was forced to review projected oil revenue targets by over 60 percent from the projected $4.8 billion to close to $2 billion for the year in May, 2015 due to a fall in international prices of the commodity from $110 to $52.

News reaching Pulse Business however suggest that the ministry will have to further revise the current target again, as oil prices continue to fall, standing at $45 currently.

Analysts predict a further drastic drop as an agreement between Iran and the United States over a long standing nuclear enrichment impasse,  has ensured that Iran's oil is available again on the international market, increasing supply of oil so much that prices will fall further.

In the press briefing, the minister is also expected to touch on Ghana's fourth Eurobond, which is targeted at raising some $1.5 billion  to cushion against the effects of revenue generation shortfalls coming up due to these developments on the international market.

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