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Only 35% of tax will go into wages & salaries by 2017 – Mahama

July 4, 2016, 8:43 a.m.

The prudent management of the economy has resulted in the reduction of revenue that goes into the payment of wages and salaries, President John Dramani Mahama has said.

According to the President, the over 73 per cent of tax revenue that went into wages and salaries has drastically reduced to 49 per cent and the government hopes to reduce that figure to 35 per cent in 2017.

Speaking at a forum in Kumasi, President Mahama acknowledged that bringing down the expenditure was a challenge, but stated that, “Today, wages and salaries as a percentage of tax revenue has come down to 49 per cent and we continue to bring it down because the ideal recommended percentage is 35 per cent.

“Your wages and salaries should not amount to more than 35 per cent of your total revenue. We brought it from 73 to 49 and we hope that by end 2017, we should be able to hit that target,” the President added.

President Mahama expressed further optimism that a reduction in that figure would allow for more disposable income for Ghanaians.

“When that happens, it means it frees up more revenue for you to invest in livelihood and to be able to invest in socio-economic infrastructure and all that,” he stated.

Ghana’s programme with the International Monetary Fund (IMF) has forced government to reduce employment in the public sector, among other austere measures.

The government has thus been criticised for stifling critical sectors of the economy from the needed human resource.