Increasing revenue mobilisation: GACC proffers solutions to Ghana's taxation system

The Ghana Anti-Corruption Coalition (GACC) has proposed means for the government to widen the tax net to increase its revenue mobilisation.

Governments over the years have run budget deficits because of lower revenues compared to expenditures within such periods. The situation has persisted due to the loopholes in the taxing system causing governments to collect taxes from a few, and a chunk of the collected few going down the drain.

At a media briefing in disseminating a taxation report commissioned by the GACC and funded by Oxfam Ghana, with the tax positions in the NPP and NDC manifestoes in perspective, government was advised on how to attain the 17% average tax to GDP ratio as envisaged by countries in Sub Saharan Africa (SSA).

The report stated Ghana lost approximately GHC10 billion within the last two years through tax exemptions, whereas the parties focus was on providing more freebies instead of reforming the exemptions.

Executive Director of Revenue Mobilisation Africa, who was a Lead Discussant at the briefing, Geoffrey Kabutey Ocansey, said, Education on taxation must be enhanced for the citizens to know why they pay tax.

He said making people understand why they pay taxes would let them oblige than the conception of paying to avoid prosecution.

Also, the discretionary tax exemptions granted to corporations according to Mr. Ocansey are too much, which immensely affect government’s total revenue. The tax exemption bill, he said, must be passed to curtail the practice.

He said some companies hide behind tax exemption to dupe the state by “operating for nine (9) years and changing their name and ownership to continue avoiding tax” due to the status quo requiring some businesses to honour their tax obligations after 10 years of operation.

Night and dawn market operators, foreigners who have not registered their businesses, masons, carpenters, dressmakers amongst other informal operators could also be captured to widen the tax net, and reduce the rates to motivate them to pay willingly according to the tax mobilisation expert.

Widening the tax net was not perculiar to only one political party as far as their 2020 manifestoes were concerned, according to the GACC report on the political parties positions on taxation.

Dealing with property rate, Mr. Ocansey advised government to take into consideration the purpose of the property and their location to apportion rates equitably.

He further averred the adoption of digitisation in revenue mobilisation as a panacea to the enormous evasion, saying probity and accountability of the taxes will curb the corruption that has engulfed the taxing system.

Joining the discussion through zoom, a Fiscal Policy Specialist at Oxfam Ghana, Dr. Alex Ampaabeng, also cited lack of political will on the part of politicians to implement strong policies as a major contribution to the lapses in the system.

“The politicians lack the political will to implement decisions because of the fear of losing elections.

“The big men syndrome where even when evaders goods are seized, one big man somewhere will call the GRA officer to give them back their goods are all reasons tax compliance is low in Ghana”, he stated.