Former Minister for Finance, Seth Terkper, has said scepticisms over Government’s inability to attain the GHS 4bn revenue target from the recently passed tax revenues by tax experts in the country comes as no surprise.
Speaking with journalists on Monday, April 3, 2023, Terkper quipped that despite the introduction of numerous taxes by the incumbent government, the country’s tax revenues as a percentage of GDP remains stagnant with no significant improvement in tax revenue mobilisation.
“There is a lot of evidence that shows that most of the taxes introduced have not improved revenue, revenues as a percentage of GDP has been stagnant and haven’t risen,” he stated, citing the e-levy as an instance of newly introduced tax that was meant to increase the country’s tax revenue to 19% of GDP, but failed to do so.
“If the taxes reduces demand, increases costs of production among others, it won’t bring the needed revenue. And there is also the instances of tax evasion among others.
“So there is a good reason for the scepticisms expressed by tax experts and business industry leaders of Government not being able to raise the targeted GHS 4bn tax revenue,” he added.
Parliament has approved new tax measures expected to raise an additional $340 million in revenue in a bid to meet requirements for the International Monetary Fund’s $3 billion bailout program.
The bills will increase some income taxes and corporate taxes, as well as the excise duty on cigarettes and various alcoholic and sweetened beverages.
Ghana is restructuring most of its public debt, which stood at about 575.7 billion cedis ($47 billion) at the end of November, to qualify for the IMF support package.
The taxes will help facilitate IMF approval for the funding after bilateral creditors give the necessary financial assurances.
Ghana is now targeting an agreement by the end of April, after the March deadline was missed.