Nation needs holistic tax policy review — Osafo-Maafo
The country must have a holistic review of its tax policies to enable it to fashion initiatives that can boost revenue mobilisation.
This is imperative for the country in the face of global economic challenges and as the second largest economy in West Africa, it has to work on improving its 14 per cent tax to Gross Domestic Product (GDP) ratio, which is lower than the ECOWAS average of 18 per cent.
The Senior Presidential Advisor, Yaw Osafo-Maafo, who stated this, said 14 per cent was one of the lowest ratios in West Africa and even the world where other countries, especially the developed countries, had an average ratio of 35 per cent.
He was delivering the keynote address in Accra yesterday at the opening of a three-day international annual tax conference of the Chartered Institute of Taxation Ghana (CITG).
The 11th conference is on the theme: “Taxation and Economic Development: A review of Ghana’s Tax policies”.
It brought together both local and international professionals such as accountants, tax experts, policymakers, academia, lawyers, security experts, top business executives, financial directors and others whose duties were to raise revenue for the state.
Mr Osafo-Maafo said there was something fundamentally wrong with the country’s tax collection which needed to be addressed because even though the percentages of taxes were not low and remained the same as in other countries, the country was not raking in as much revenues as the other countries were doing.
That, he said, did not mean that the government must introduce more taxes, rather, it must deal with how it would effectively collect the taxes.
“This, therefore, means that it is not about the tax figure but something rather missing with how the taxes are collected.
And what is missing is what we want the participants in this conference to find out to help the government to deal with the problem,” the Senior Presidential Advisor said.
Mr Osafo-Maafo said the government over the years had modernised the tax administration but in spite of the progress, tax evasion still remained a challenge.
The Senior Presidential Advisor pointed out that the most developed countries financed their development through their own taxes; however, only a small proportion of Ghanaians were paying taxes, with many others not contributing to the taxes, thereby robbing the country of huge revenue for its development.
“We in Ghana cannot allow 2.4 million people out of over 30 million people to carry the burden of direct taxes and continue to suffer paying other taxes,” Mr Osafo-Maafo said.
He challenged the institute to come up with necessary proposals to “assist us the government to overcome this challenge,” and also called for a collaboration between the Ministry of Education and the CITG, as a matter of priority, to introduce tax education, beginning from the basic schools to become part of the curriculum to educate pupils on the need to pay tax so that as they grew, it became part of their lives.
Bring back road toll
The President of CITG, George Ohene Kwatia, said the conference would serve as an education platform that would offer participants the opportunity to acquire more knowledge and improve on their skills in varied areas for the benefit of businesses and the nation.
The Minister of State at the Ministry of Finance, Dr Mohammed Amin Adam, said taxing the informal sector was a necessity because as a developing country, Ghana must be able to raise much revenue to deal with its socio-economic challenges.
An economist with the Institute of Statistical, Social and Economic Research (ISSER) of the University of Ghana, Charles Godfred Ackah, called for the abolition of the E-Levy which had failed to meet its revenue target and rather re-introduce the road toll as it was a fair tax that would help the government make good revenue for the state.
Also, much attention should be given to the property tax which could rake in GH¢2 billion revenue annually.