Minister of State at the Ministry of Finance, Charles Adu Boahen has hinted that government will use the 2022 budget to introduce more policies and strategies to rake in more revenue and widen the tax net.
According to him, this forms part of efforts to facilitate effective and efficient mobilisation of taxes in the country.
In the first half of 2021 alone, the Ghana Revenue Authority has witnessed a GHS212 million shortfall in tax revenue. The Authority collected GHS25.89 billion in tax revenue as against 26.1 billion cedis targeted for the period.
Speaking at the Graphic Business – Stanbic Bank Breakfast Meeting in Accra, Charles Adu Boahen noted that the budget will also introduce concrete measures that will help keep the country’s expenditure management in check.
“This budget is focused on expenditure rationalisation and optimising the implementation of our flagship and strategic programs, widening and deepening existing revenue resources including expanding the tax net. Due to the elevated debt levels in 2020, we saw our fiscal space continue to be eaten up by high interest expenses. If you look at how much of our revenue we were using to service our debt, it is clear that we need to look at how we can reduce the cost of borrowing. Along side that, given the fact that we have such high debt levels, we have to focus on revenue maximisation. We still really do not believe that we are maximising our revenue potential. I think our tax revenue as a percentage of GDP is between 13 to 14 percent. And most countries, even some of our peers in Africa is closer to 18 or 19 percent. So clearly there is a lot of room for growth,” he said.
He also stated that plans are far advanced for the passage of the Tax Exemptions Bill. According to him, Cabinet is deliberating on the final draft of the Bill.
The bill which is long overdue, when passed into law would help government streamline tax exemptions for businesses and foreign investors in the country.
“With the exemption bill, we are working to get it laid before the reading of the 2020 Budget, because it has been long overdue and the objective is to get it done before 2022. We will lay it before submitting the budget itself by this month and same with the implementation of the property rate. As you can see, some work is ongoing with the digital address systems.”
Over the years, Ghana has lost a lot of money due to the lack of proper tax collection systems and inability to monitor the figures.
For instance, the Ghana Revenue Authority witnessed a 212 million cedi shortfall in tax revenue, in the first half of 2021. The Authority collected 25.89 billion cedis in tax revenue as against 26.1 billion cedis targeted for the period.
Though government recently set up the Revenue Assurance and Compliance Enforcement (RACE) initiative to help the country achieve its revenue mobilization target, stakeholders have called on government to do more rake in more taxes, identify and eliminate revenue leakages, reinforce the culture of compliance and increase the revenue-to-GDP ratio to support the implementation of the Ghana CARES Obaatanpa programme, among others.
