Mid-year budget review to see tax policies measures – Finance Minister

Finance Minister, Ken Ofori-Atta

The Finance Minister, Ken Ofori-Atta has indicated that government, in the mid-year budget review, will present a package of tax policy measures aimed at sustaining funding for its key programmes.

Ofori-Atta made this known at the conference on ‘Moving Beyond Aid-Revenue Mobilization G20, compact with Africa (CWA)’.

“We have therefore begun consultations with key stakeholders on the need to mobilize more revenues,” he noted.

Although tax revenue, relative to GDP has increased from about 12.7 percent in 2006 to 16.3 percent in 2017, it is still well below the average of the country’s lower middle-income peers, which is over 20 percent.

For the year 2018, domestic revenue made up of tax revenue, non-tax revenue, social contributions and ESLA receipts is estimated at GHS 50, 452.4 million. Of this amount, the non-oil tax revenue constitutes 77 percent of domestic revenue for the year, at GHS 39,001.9 million.

The anticipated increase mainly mirrors the impact of expected improved tax compliance, as well as proposed tax policy measures such as the review of the suspense regimes, and implementation of the excise tax stamp policy, among others.

Ofori-Atta reiterated government’s intention to broaden the tax base of the country.

He said, “we believe that as a government we must tax smarter and not harder. And to achieve this goal, government must endeavor to expand its tax base.”

In order to broaden the tax base and uniquely identify potential taxpayers, government has rolled out the compulsory tax identification numbers (TIN), this month.

Estimates point to the existence of about six million potential individual taxpayers in Ghana; only about 1.5 million are formally registered with the GRA.

Of this number 1.36 million are employees, implying that most self-employed individuals are not registered with the Authority.

Ofori-Atta noted that, moving Ghana beyond aid requires a solid revenue base to ensure adequate resources for financing its economic transformation.

“Given this stage of development, Ghana’s revenue collections are low with limited fiscal space to support the pace of investment needed to achieve a Ghana beyond aid.”

By Joshua W. Amlanu