Address tax inefficiencies for more revenue — Prof Bokpin
An economist and Professor of Finance, Professor Godfred Bokpin, is alarmed at the numerous taxes imposed on just a few Ghanaians who are eligible to pay tax.
He asserted that burdening a minute percentage of the tax paying population of the country won’t spur the growth that the country deserves.
Professor Bokpin, consequently, tasked government to impress on the tax collecting agencies to generate sufficient taxes from eligible taxpayers who are out of the tax net.
“Out of a tax paying population of 13.4 million, only 2.5 million pay direct income taxes. We are not generating sufficient taxes from the various tax bodies but we have saddled a few with so many taxes. This must change,” he noted.
He called for a change in the structure of the economy that will ensure the remaining 10.9 million tax paying population honour their tax obligation to the state.
IMF’s focus on macro
Taking his turn on the Graphic Business Twitter Dialogue Series in Accra last Monday on the topic ‘IMF Review of the Ghanaian Economy’, Professor Bokpin stated that the IMF’s preoccupation was macroeconomic stability which is inimical to households and the ordinary Ghanaian citizen.
He noted that if the cost of seeking macroeconomic stability was not appropriately managed and its transition mechanisms to micro was not optimal, it would have an effect on the economy.
“Burden-sharing has become burden transfer; the government has transferred its burden to private companies and households that means the payment of higher prices of goods and services,” he noted.
He challenged government to cut down on its size and ensure efficiency with its tax collecting system to sustain the gains chalked up under the current debt restructuring and IMF programme.
He also advocated the restructuring of state owned enterprises to make them efficient and fit for purpose.
According to him, if government was lean with some ministries merged, it would have a long-term significance on the citizens.
“Ghana needs greater discipline, and a little bit of money, not money; there is a huge inefficient government size. The country must strike a balance between government operational cost and growth enhancing balance space,” he noted. He disclosed that the average Ghanaian spent 42 to 44 per cent of their disposal income or household expenditure.
He said the IMF and Bank of Ghana’s projected growth of more than 1.5 per cent at the end of the year would be artificially driven as it failed to address the major problem of unemployment and inflation.
“Growth must come along with job creation, BoG’s data on real economic activity is contracting at a slow pace, Ghanaians want job rich growth; the service sector and the agricultural sector which is growing at 6.2 per cent don’t come with job creation,”