By Jibril Abdul Mumuni
Accra, Aug. 16, GNA – Ghana can raise substantial additional domestic revenue by improving Value Added Tax and corporate income tax compliance, the Tax Justice Coalition-Ghana has said.
The Coalition said closing existing tax gaps could generate more revenue without introducing new taxes or increasing existing tax rates.
Mr Benedict Doh, National Coordinator of the Tax Justice Coalition-Ghana, said this in an exclusive interview with the Ghana News Agency.
Mr Doh, who also coordinates the Tax Justice Platform and works with Transparency International Ghana, said revenue mobilisation efforts should focus on broadening the tax base and improving compliance rather than imposing additional tax burdens on citizens and businesses.
“We have noticed from a number of our studies that tax gaps exist when it comes to VAT and corporate income tax. There are significant opportunities to mobilise more domestic resources through these tax handles,” he said.
Mr Doh said available studies indicated significant gaps within the VAT and corporate income tax regimes, suggesting that considerable revenue remained uncollected under the existing tax framework.
He said improving tax administration, strengthening compliance and bringing more taxable economic activities into the formal tax system could help Government increase domestic
revenue.
Mr Doh said broadening the tax base remained one of the more sustainable approaches to domestic revenue mobilisation and could support Ghana’s development financing needs without placing additional pressure on existing taxpayers.
He identified illicit financial flows (IFFs) as a major challenge to revenue mobilisation.
Mr Doh said the movement of illicit funds out of the country deprived the state of resources that could otherwise be invested in infrastructure, education, healthcare and other essential public services.
“There is the need for all of us to think through and identify measures that can help address and curb illicit financial flows,” he said.
Mr Doh also called for greater transparency and accountability in the granting of tax exemptions.
He said the Tax Exemptions Act, passed in 2022, required the publication of annual tax expenditure reports detailing the value of tax exemptions granted by the state.
The Act also provides for cost-benefit analyses to determine whether the economic benefits of tax incentives justify the revenue forgone by the Government.
Mr Doh said effective implementation of those provisions would strengthen public accountability and provide policymakers with information to assess the effectiveness of tax exemption regimes.
He also called for increased disclosure of beneficial ownership information on companies receiving tax exemptions.
On tax equity, Mr Doh said reforms should promote fairness and avoid worsening existing social and economic inequalities.
He said members of the Coalition continued to advocate greater attention to the gender dimensions of taxation to ensure that tax policies did not disproportionately affect women and vulnerable groups.
“Tax policies, if not properly designed, could end up deepening inequality in society,” he said.
GNA
Edited by Kenneth Sackey
Reporter: Jibril Abdul Mumuni