The Government of Ghana is said to provide 60% of the funding for the cars that Parliament has previously proposed for MPs and council members.
Before that regard, the Finance Ministry has presented two separate loan agreements in Parliament.
If authorized, each member of the House of Commons and each member of the Council of State would get about $100,000 towards the purchase of a car.
In the case of the MPs, the government is seeking permission from the National Investment Bank to obtain a $28 million credit facility for the project.
It also wants Parliament to approve a $3.5 million loan arrangement with the NIB to buy cars for the state council’s 31 members.
According to the agreement document, $28 million facility must be paid within 45 months, and the $3.5 million loan facility must be paid within 42 months. Per the document, MPs and members of the Council of State will be responsible for just 40% of the principle amount, while the government would be responsible for 60% of the main amount as well as any loan interest.
“The repayment of the facility by the beneficiaries shall be made from deduction at source by the Parliamentary Service of Ghana to the NIB. The repayment by the beneficiaries and the Government of Ghana shall be made at the end of every month for the duration of the agreement,” portions of the agreement read.
Ghanaians are furious over the agreement, with some claiming that the money might be better spent on economic industries or development initiatives that would benefit the people.
Read Also: Government announces a $3.5 million vehicle loan arrangement for members of the Council of State
Ghana’s government is still struggling to achieve its income goals.
This has been exacerbated by the COVID-19 epidemic, which has prompted the government to seek outside financial assistance to augment its own finances.
In light of this, the Akufo-Addo administration has raised petroleum product taxes while also introducing new ones in an effort to boost income to fund the country’s operations.
Is it a loan or a gift?
Professor Stephen Kwaku Asare, often known as Prof. Kwaku Azar, is a private law practitioner and accounting professor who thinks the transaction is a gift disguised as a loan.
“The government pays the beneficiaries $27,500,000 (i.e., $100,000 * 275) over 45 months, while the recipients pay the government $11,000,000 ($40,000 * 275).” The difference of $16,500,000, plus $4,561,666 in interest, is a non-taxable wealth transfer from the government to the beneficiaries.”
“You can’t call a loan if you give someone $100,000 plus interest and expect them to pay you $40,000 over four years. Simply put, you’re giving the individual a non-taxable gift of $60,000 plus interest that’s been disguised. On Thursday, July 8, 2021, he wrote on his social media profile, “Let us call a loan a loan and a present a gift.”
Source: CITINEWSROOM
