Revise user fees to increase non-tax revenue – IFS in government

Company News of Monday, July 22, 2019

Source: www.ghanaweb.com

2019-07-22

The Institute of Fiscal Studies (IFS) has advised the government to revise its usage fees to increase non-tax revenues.

Leslie Dwight Mensah, an IFS economist, told the media about IFS 'review of the economy before the mid-year budget presentation that the government needed to strengthen the administration and the mobilization of non-direct taxes. since 2017 as a way to improve revenue performance.

To achieve this, Mr. Dwight Mensah said that royalties collected by public agencies whose real values ​​have declined due to minimal or even nil adjustments over long periods of time need to be revised.

According to him, "the underperformance of tax revenues comes from regions that have benefited from tax cuts and we are asking the government to intensify its efforts in these specific areas".

Over the years, the country has struggled to raise revenue by raising taxes to match the level of economic activity.

Last year, the government planned to collect about 40 billion ¢ of GHGs but missed this goal by just over 5%.

The country's tax-to-GDP ratio would be around 12%, although according to the Minister of Finance, the government is expected to make about 20%.

In the 2018 budget, the government has granted tax exemptions to some manufacturers, as well as some harmful taxes on some imported products, including spare parts.

The government has been asked to review the tax exemptions granted to investors and businesses, which, according to experts, cost more than $ 2 billion.

Speaking on the issue, the IFS economist said the tax exemptions introduced by the government had created distortions in the companies.

"It's probably not appropriate to say that we're going to reimpose taxes, because that's what happened, it's also the tax cuts and other tax changes that were made. ; the flat rate, the VAT … they introduced distortions and caused a lot of stress to companies and it's the thing with a lot of tax changes in a short time … So what we're saying is that they should appreciate where the gaps in tax revenues are concentrated and do more in these areas, "he added.

Finance Minister Ken Ofori Atta is scheduled to appear before Parliament on Monday, July 29 to present this year's mid-year budget.