The Institute of Fiscal Studies (IFS) has urged government to use the 2018 national budget to improve domestic revenue mobilization.
According to the institute, government must diverse its revenue targets as the current trend shows declining domestic revenue collection compared to other West African countries.
Speaking at a Pre 2018 Budget Forum in Accra, the Executive Director of the IFS, Prof. Newman Kwadwo Kusi pointed out that government may not resort to issuing bonds if pragmatic measures are taken to improve tax compliance.
“Ghana’s actual domestic revenue has fallen short of the country’s economic potential and level at which institutional development could make,” he said, adding that “if Ghana’s domestic revenue has performed like its regional compatriots the country could have generated significantly more revenue which could have been used to pay off its fiscal deficits with extra money to pay off some of its debt”.
Prof. Kusi argued that government must take decisive steps to correct the revenue shortfall since it will be crucial in maintaining a balanced budget for infrastructure development.
He pointed out that Ghana’s programme with IMF is about prudent spending while the nation works to generate internal funds for economic growth.
“The IMF submits that the government must pay serious attention to revenue mobilization and consider it as the number one priority of the government,” he said.
Prof. Kusi recommended that government must use new modules to expand the base of the tax net to improve revenue generation.
“Government must adopt a revenue mobilization strategy that seeks to strengthen revenue administration, improve tax compliance, help combat abuses and corruption, and increases that fiscal space for public investment and social spending”
“What is urgently needed this requires a closer look at revenue from the mining sector, the Freezone, the Informal sector and the state owned enterprises as well among others,” he added.
By: Lawrence Segbefia/citibusinessnews.com/Ghana