Business News of Friday, 26 October 2018
Executive Director of the Institute for Fiscal Studies, Professor Newman Kwadwo Kusi has advised government to review the tax systems in the upcoming budget in order for government to realize more revenue for the country.
The budget has been scheduled to be read on the 15th of November, 2018.
Professor Kusi argues that the move to increase tax collection is prudent if government intends to sustain the various social intervention programs it has started such as Free SHS and Planting for Food and Jobs.
Currently, Ghana’s tax to GDP ratio is below 13% which is below the expected average of 18% for developing economies.
According to Professor Newman Kusi, government’s idea of moving the economy from taxation to production is a risky move, which should be reviewed.
He believes that government should rather focus on collecting more tax to develop the economy.
“It’s very ridiculous to say the least, because the average for African countries is 18 %; our GDP is now two hundred and fifty-six billion cedis. So if we are collecting only 13% of our Gross Domestic Product then really government has to find very significant and crafty ways of enhancing domestic revenue.”
Although he believes measures such as the Tax Identification Number is laudable, he has advocated the extension of the scope of the policy.
Currently without the TIN, one will not be able to open a bank account, register a new company as well as obtain a passport.
“For any financial transaction in this country, the person who is undertaking that transaction has to prove that he has a Tax Identification Number, in other countries where I have lived you cannot do anything without your TIN”.
He added, “Once we have that in place, that makes the revenue authority to be able to know exactly what it is that you are involved and how much you are spending and where you get the money from and therefore to be able to determine accurately the tax liabilities and follow up for you to pay your taxes, irrespective of where you get the money from”.
He made the comments at the sidelines of a tax dialogue organized by Oxfam.
For this year, government intends to raise 3.9 billion through taxes, compared to its projected tax revenue for last year which was at 3.1 billion cedis