As Parliament prepares to begin debating the 2022 Budget Statement on Tuesday, November 23, 2021, a senior lecturer in the Department of Economics at the University of Ghana, Dr. Adu Owusu Sarkodie has called for a more holistic approach to revenue mobilization next year.
The Minister for Finance, Ken Ofori-Atta on Wednesday, November 17, 2021, announced new measures to shore-up government revenue and to enhance job creation in the 2022 fiscal year.
Key amongst the measures to raise the revenue next year is the imposition of a 1.75 percent levy on all electronic transactions above GH¢100.
Other measures include the restoration of the Benchmark Values of imports by suspending the 50% discount on selected General Goods and the 30 % discount on vehicles, the implementation of the Unified Common Platform for Property Rate Administration with effect from January 2022, as well as the intensification of the Revenue Assurance and Compliance Enforcement (RACE) initiative to plug revenue leakages amongst others.
While the public is divided on some of the revenue measures, especially the E-Levy, others like Economist Dr. Adu Owusu Sarkodie are advising the government against focusing on the low-hanging fruits to shore up its revenue.
“Government should not only concentrate on the easy ways of raising revenue, like taking fuel and mobile money transactions. There are other areas that can raise more revenue for the government such as tax exemptions. Tax exemptions alone cost Ghana GH¢ 4.6 billion a year.”
Dr. Sarkodie also urged the government to look at profits from the telecommunications sector as a source of revenue.
“During the height of the COVID-19 pandemic when the economy was underperforming, the telco companies made over 60 % more profit from their operations, and therefore I believe that government should find a way to increase the tax on the profits. We can also talk about revenue from the natural resource in the country. If the government’s participating interest in various natural resources increases to 55% we can raise GH¢ 33 billion every year. If we have this money, there will be no need to go and borrow.”