government needs to rationalise the many tax exemptions that are granted
multinational companies, Professor Godfred A. Bokpin, a Fellow of IMANI Centre
for Policy and Education has said.
said the government should also explore and deepen efforts in mobilising
domestic tax revenue and avoid tax exemptions.
at a lecture organised by IMANI Centre for Policy and Education, Prof Bokpin
said the country was losing more revenue on tax exemptions to multinational
businesses, who were in tax payment positions.
spoke on the topic: ‘Is Ghana’s debt sustainability under serious threat after
the International Monetary Fund programme?’
country’s total debt at the end of 2018 was GH¢198 billion as at March 2019,
which is 57.5 per cent of Gross Domestic Product.
said the country needed to develop strategies for an inclusive economy growth
that would integrate the oil and gas sector and other sectors to strengthen the
public investment process to manage the country’s debts.
said over the years, the country had struggled to manage its debts because of
the inability to generate the desired direct taxes, which had become a bane to
Professor said the country’s tax collection ability did not work well in
elections period because of the interest to satisfy all sectors of the economy
for fear of losing votes.
said “in the past, it took two years for a government to clear the country’s
total debt upon assumption into power, but now, it takes an average of four
years, attributing the situation to indiscipline fiscal spending during
called on Ghanaians to adopt a monitoring mechanism to ensure that governments
did not spend beyond its limit.
tax to GDP ratio in Ghana is 17 per cent compared with a 19.1 per cent average
in Africa, 22.8 per cent in Latin America. Investment in the operations of the
Ghana Revenue Authority (GRA) holds the key to enhanced domestic revenue
mobilisation, he said.
Bokpin said it was good for a country to borrow, but the money must be used for
its intended purpose and not on consumption of goods and services and employees’
called on the government to ensure that the cost of fiscal consolidation was
evenly distributed to all and sundry by expanding social safety net programmes
towards restoring the real income of the poor.
sustainable fiscal consolidation has been constrained by revenue challenges and
urged government to act prudently not to hide under the shadow of rebasing of
the economy to borrow more, which did not necessarily increase cash flow to the
said the country had a potential of generating up to GH¢89 billion in taxes to
mitigate the debt to the Gross Domestic Product (GDP), but the current
projection was GH¢45 billion, urging the GRA to deploy mechanisms to close the
Bokpin urged government to deal with trade mis-invoicing, which had denied the
country of huge sums of revenue.
loses more than $2 billion through trade mis-invoicing, which is 67 per cent of
the recent Eurobond issue and 70 per cent of the budget deficit for 2019.
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