Panellists at a post budget forum have called for measures to halt the massive revenue leakages that have arisen as a result of what they described as loopholes in the tax collections system.
They argued that tax collections, when done effectively and efficiently could be one sure means to bring down the country’s debt burden.
They noted, for instance, that although the increase in the value Added Tax (VAT) from 15 to 17.5 per cent and the introduction of rent tax in the country were meant to rake in more revenue to support government’s development agenda, effective collection still remains a challenge and noted that until measures were put in place to address that, the positive rationale behind that intent, among other things, would be defeated.
They also raised the issue about the prudent management of the revenues collected from taxes to enable the taxpayers benefit from what had been collected.
They were contributing to discussions at a forum organised by the Ministry of Finance in collaboration with the Institute for Financial and Economic Journalists (IFEJ) to create a platform for the ministry, the media and civil society organisations to share their perspectives on the budget.
An economic expert and lecturer at the University of Cape Coast, Mr John Gatsi, explained that the current tax system did not help government to attract all the necessary revenue it was supposed to gather.
“Even though our tax system is based on self-assessment, we have realised that this does not bring in the revenue we want, and it is only when we improve on monitoring that we can get the revenue that is readily available,” he said.
Citing instances of engaging private tax experts to audit areas where tax men have already assessed, Mr Gatsi noted that most often these external tax experts raised extra revenue in excess of what had already been raised by staff of the tax agency.
He also mentioned instances where tax collection went up drastically when National Service persons were used to assist in collection and wondered why that could not be repeated.
Ghana, as a country, he said, had moved to a different level of revenue mobilisation, “where we do not leave the revenue mobilisation in the hands of only the Ghana Revenue Authority, (GRA), they can collaborate with other private entities to be able to do it.”
Mr Gatsi said revenue mobilisation should be a governance issue so long as disclosure, accountability and transparency were concerned.
An economist and lecturer at the University of Ghana, Dr William Baah Boateng, for his part, said whereas the Value Added Tax (VAT) was one way of raising revenue for government, there was the need to ensure that the collection was done more effectively.
According to the 2014 Budget and economic policy, government would ensure fiscal prudence and debt sustainability through improved revenue mobilisation and rationalising and enhancing the efficiency of public expenditures, as well as reviewing the financing methods.
“Government will continue to resource the Ghana Revenue Authority (GRA) to broaden Ghana’s tax base and improve their efficiency in the collection of revenue. Specifically, fiscal policy will focus on improving revenue mobilization, an effort being led by the Ghana Revenue Authority (GRA) under its on-going Revenue Modernisation Programme,” it said. GB