Ghana plans to change its approach towards tax collection in a bid to increase its revenue that aims at raising spending and reducing debt levels.
According to report, Kwasi Bobie-Ansa, an acting assistant commissioner at the Ghana Revenue Authority noted that the country plans to bring over two thirds of the Nation’s businesses in the informal sector into the tax net.
In 2017, Ghana collected 27.4 billion cedis ($6.2 billion) in taxes, equivalent of 13.4 percent of gross domestic product, against an expected 29.4 billion cedis, the finance ministry provided.
Giving an insight to the matter, Edem Harrison, a research analyst at Frontline Capital Advisors in Ghana told Bloomberg that “Ghana does not necessarily need to legislate new taxes, but must find ways of widening the net” such as blocking “revenue leakages” and stopping “wastage at revenue collection points such as the ports.”
Prior to taking the decision of buffing its revenue through tax generation, the International Monetary Fund (IMF) had recommend that the West African country deepens its tax base and review incentives in order to improve revenue collection.
With the end of the country’s 3-year $1 billion bailout program with the Washington-based lender approaching, the Nation intends to meet fiscal consolidation goals through revenue generation that would help rein in years of prolonged overspending.
Attaining Ghana’s fiscal targets would require raising collections since spending on fixed investments are low at the moment and the government has not been raising sufficient income, IMF noted.