An internal document of the International Monetary Fund (IMF) obtained by the ”Insight” shows clearly that the government has been economical with the truth in its explanation of its fiscal policy for 2003. The document states that inspite of the numerous denials of the Minister of Finance and other top officials, a firm decision has been taken to increase the VAT rate by five percent.
The document headed ”Ghana –Back-to-Office Report” was prepared for the information of the IMF’s Managing Director and his deputies.
The document admits that raising the VAT rate would cause substantial problems for the government and suggests that the increase should be given another name.
It reads: ”The budget would incorporate a 5 percent point increase in the VAT rate, albeit rebranded to make it politically more palatable”.
It also speaks about the need to limit wage increases in the civil service to ”what could be afforded within the domestic financing constraint”.
The document also confirms claims by the Socialist Forum of Ghana that recent petrol price increases should not have exceeded 30 to 40 per cent.
Source: GhanaWeb
