The Deputy Minister of Finance in the former National Democratic Congress (NDC) government, Mr. Victor Selormey has challenged the Minister of Finance Mr.Yaw Osafo-Maafo's statement that the former government withdrew ?900 billion from government coffers in the last quarter (October to December) of 2000.

But in a swift reaction, Selormey who spoke to journalists soon after listening to the Minister outline government's economic policies for the year said, Osafo-Maafo's statement cannot be true adding he is prepared to put his reputation on the line.

He insisted that there was never any occasion when government ever decided to withdraw such an amount from the coffers in the last quarter. Moses Asaga, also a deputy Minister of Finance in the former government and now the Shadow Minister of Finance also insisted that the former government did nothing of the sort. "We dispute the figure the Minister of Finance has just indicated.

We will like to call on the Minister of Finance and the governor of the Bank of Ghana to give us the details and the breakdown of these disbursements. While presenting Budget 2001 to Parliament last Friday, the minister said ' Two months after taking office, our Government is still uncovering the exact magnitude of various holes and gaps in the financial position which it has inherited. "Just take one example: the NDC Government ended its days by going on an irresponsible spending spree in the very last quarter of Fiscal Year 2000.

The Bank of Ghana suddenly found that, without any prior agreement or planning, the Government had increased its overdrawn position from ?3 billion at the end of September to about ?900 billion by the end of December," he added. But Osafo-Maafo in a subsequent interview insisted that the figures he quoted were true as they were provided by the Governor of the Bank of Ghana, Dr. Kwabena Dufuor. He added that if Selormey disputed the figures then the BoG governor might not be telling Ghanaians the truth.

But there was good news for Ghanaian workers who are to enjoy some tax reliefs under Budget 2001. These reliefs would be paid upfront unlike in the past where they are paid after citizens file their tax returns. According to the Finance Minister, the minimum taxable personal income has been raised from ?900,000.00 to ?1,200,000 while the "top marginal tax rate of 35 per cent applicable to incomes in excess of ?17.4 is now applicable to incomes in excess of ?48.0 million." Other measures are the marriage/children's relief and a disabled person's relief.

An old age relief granted persons of or above 60 years a ?300,000 yearly tax relief. The new law also granted a children's education relief which adds ?240,000 annually to any person sponsoring the education of his child or ward in any recognised registered education institution. This relief covers three children. Corporate taxes were also reduced from 35 per cent to 30 per cent for quoted companies on the Ghana Stock Exchange while those not quoted had theirs fixed at 32.5 per cent.

Withholding tax has however been increased from five per cent to seven and a half per cent. But the most surprising news was government's decision to join the Heavily Indebted Poor Country (HIPC) initiative effectively ending the ongoing debate over whether Ghana should join or not. According to the minister, this has become necessary in view of the fact that "we would have to spend another ?4.4 trillion this year in servicing external debt, and ?2.1 trillion in domestic interest payments.

These sums represent 11.7 per cent and 5.5 per cent respectively of the economic resources that are forecast to be available in the GDP this year to meet all the public and private needs of our people.' According to the minister, the debt sustainability analysis carried out on Ghana and the country's inability to raise enough revenue from or attract external inflows beyond the presently committed levels has made President John A. Kufuor to take that decision 'that Ghana should take advantage of the HIPC initiative immediately.'

The President, according to the minister, has instructed him to take 'all steps necessary to ensure that Ghana gets the full benefit under the HIPC initiative.' In a television discussion on the Budget, Dr. Paa Kwesi Nduom, Minister of Economic Planning and Regional Integration described the Budget as a first installment, adding that since the government's economic team is daily discovering fresh figures, it is around June that they can come out with a more permanent budget.

On the HIPC initiative, he explained that the government had little choice, considering the state of the nation's indebtedness. He said there was no point in pretending that we are not bankrupt, since the outside world knew the state of our economy.