By Francis Ntow
Accra, Jan 22, GNA – Some economists have called for creative and intentional programmes aimed at orienting Ghanaians to improve tax compliance and enhance domestic revenue mobilisation.
This comes as the current government plans to scrap several tax measures introduced by the previous administration, including the electronic transfer levy (E-levy), COVID levy, 10 per cent levy on betting winnings, and emissions levy.
A 2024 survey, jointly conducted by the Ministry of Finance and TaxDev researchers from the Institute for Fiscal Studies (UK), revealed that the country’s tax-to-Gross Domestic Product (GDP) ratio stood at 13.8 percent in 2022, falling short of the government’s target of 18 to 20 per cent by 2027.
Economists emphasized that increasing the country’s revenue required both intensified education on tax compliance and improvements to systems for fast, easy payment and government accountability.
Speaking with the Ghana News Agency, Dr. Daniel Anim-Prempeh, a Chief Economist with the Policy Initiative for Economic Development (PIED), noted that mobilizing the necessary revenue would not be achievable in the short term.
However, if the government developed creative ways to educate Ghanaians on the importance of paying taxes, it would boost compliance and increase revenue, he noted.
“It needs a lot of education for people to appreciate why they need to comply and find their retention time and appropriately build it, and that’s what the government must focus on.
“If they’re able to motivate the Ghana Revenue Authority and the National Commission for Civic Education and give them the tools to educate Ghanaians, things can change,” he noted.
Dr Anim-Prempeh stated that Ghana’s tax system has not been robust, compared to advanced countries where structures were solid and effective in raking in taxes from various sources, hence, the need for consistent awareness creation.
“We don’t have data on the informal sector and how much money people make in the sector. It is important to intensify education to ensure that we appeal to the conscience of the citizens to comply with tax payment and the rest,” he said.
Dr. Benjamin Amoah, a Senior Lecturer at the Department of Finance, University of Ghana Business School, also noted that the abolition of some taxes necessitated the improvement of tax compliance measures.
“The government wants to abolish COVID-19 levy, and the 10 per cent betting tax, which are bringing in some form of revenue. So, if you say you are going to take them off, then you must make sure that you have enhanced tax compliance measures,” he said.
Dr. Amoah said that the government must effectively educate Ghanaians so that through better compliance, taxes and other levies collected would surpass the current revenue generated from those taxes.
During his vetting on Monday, January 13, Finance Minister nominee Dr. Cassiel Ato Baah Forson pledged the government’s commitment to increasing the country’s tax-to-GDP ratio to 18 percent in the short term.
“We do not necessarily have to increase taxes to generate revenue, there is a need to improve compliance and address inefficiencies in the tax system,” he stated.
GNA