As the government gears up for the presentation of the 2022 Budget Statement and Economic Policy in Parliament, there is an ongoing national conversation on how the government should go about its revenue mobilisation in order to close the gaping fiscal deficit in its books.
With dwindling revenue streams attributable to the slowdown in business activities occasioned by the Coronavirus pandemic, Ghana is lagging behind most of its peers within the West African sub-region as far as the tax to Gross Domestic Product (GDP) ratio is concerned.
While Ghana is doing below 15 per cent, countries in the sub-region like Cote d’Ivoire and Nigeria are hovering around an average of 18 per cent, raising questions about whether or not increasing taxes in the 2022 budget will help the government shore up revenue inflows to fund development projects.
The Minister of Information, Mr Kojo Oppong Nkrumah, in an interview with journalists in Accra on Wednesday, 10 November 2021, suggested that as demand for public services like the construction of roads and hospitals has seen an uptick, one of the ways the government can bring about development is to mobilise more domestic revenue to enable it to satisfy the legitimate needs of the people.
“Obviously, we would need to introduce some new broad-based taxes if we are to rake in the needed revenues to deliver what our people desire”.
“New taxes may have to be imposed on items that exclude the poor and do not have high cascading effect so that it does not increase the difficulties that the Ghanaian is going through”, he said.
According to him about, 8 per cent to 12 per cent of the country’s GDP, which ideally should come to the government, is not coming in.
Yet, he noted, these economic activities are ongoing and are being recorded, forcing the government to find ways to mobilise funds through taxes to fund the demands for roads, schools, hospitals.
He said the government’s target through the 2022 budget is to consolidate the gains made so far in previous years and reboot the economy and set it back on track.