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2017 Budget to address revenue leakages

2017 Budget to address revenue leakages

The Senior Minister, Mr Yaw Osafo-Maafo, has disclosed that the 2017 budget will introduce policies and measures that will address the revenue leakages in the country.

He said that the government had taken on board suggestions from individuals and organisations on how to address the revenue leakages, adding that all those suggestions would reflect in this year’s budget statement.

Mr Osafo Maafo said this at the GRAPHIC BUSINESS/ STANBIC BANK Breakfast Meeting in Accra yesterday.

“We are going to make sure that all leakages are sealed. The revenues must reflect what the people actually pay,” he stated.

He said the government would ensure that revenues due the government were duly collected.

“We will ensure that revenues are properly managed and protected. We are determined to ensure that as we reduce taxes, we will get the ones that are due the government so that they don’t go into individual’s pockets,” he noted.

One of the major challenges with governments in the past had to do with the massive revenue leakages in the country’s financial system. There are reports which indicate that the leakages at the ports, for instance, far exceed what is recorded as the real figure for the year.

Much as the revenue collection agencies sometimes meet and exceed their targets, there is the belief that what is not accounted for is equal to what is recorded, if not more.

Maximise revenues

He said the government would also come out with policies that would ensure that revenues were maximised.

“We are going to cancel some taxes but we will ensure that we even get more revenues,” he stated.

He said as promised in its manifesto, the government was going to abolish some taxes, which included reducing the Value Added Tax (VAT) for micro and small enterprises from the current 17.5 per cent to a flat rate of three per cent.

He also indicated that it would abolish the special import levy and the five per cent tax on real estate.

He said the taxes would be reviewed bearing in mind the creation of an enabling environment for productivity to go up.

Revenue leakages

In a report which was submitted to the Deputy Chief of staff by the Ghana Revenue Authority and the Special Operations Unit (SOU) at the Presidency in 2015, it was estimated that the country lost about GH¢500 million annually in terms of revenue through smuggling by articulated trucks.

These truckloads of imported goods enter the country through the landed borders without paying taxes/duties.

It was estimated that more than 50 articulated trucks enter Ghana through various entry points weekly without paying taxes.

It also captured that the country lost more than GH¢36 billion in revenue as a result of fraudulent activities by some importers, officials of the Ghana Revenue Authority (GRA) and the Special Operations Unit (SOU).

According to the report, falsified invoices and other documents from destination inspection companies (DICs) and the use of wrong custom procedure codes constituted some of the major sources of revenue leakage.

It said there had been a massive evasion of duties on goods imported through the sea ports and the Kotoka International Airport (KIA).

The Decision of the government to introduce measures in the 2017 budget to curb some of these situations will, therefore, go a long way to improve our revenues.

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