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Introducing new taxes without growth in GDP counterproductive – Tax expert
The President of the Chartered Institute of Taxation Ghana, George Kwatia, has advised government to close the tax gap by investing in existing tax laws rather than introducing new levies.
According to him, the introduction of new taxes and increases in levies without a corresponding increase in the country’s Gross Domestic Product is counter-productive.
Speaking on a Joy Business discussion themed, “Ghana’s High Taxes; the causes and finding remedies”, Mr. Kwatia said a cursory look at the budget shows that shortfalls in projected revenue could be blamed on increased taxes when economic growth is low.
According to him, increasing and introducing new taxes without an assessment of growth projection will always create a gap that may lead to revenue gaps.
“If you look at total tax revenue, I have mentioned that in the revised one for 2023, government is only looking at ¢108 billion, while we have a tax gap of about ¢55 billion to ¢70 billion”, he said.
Mr. Kwatia explained that new taxes do not necessarily guarantee an increase in taxes particularly when economic activities are not encouraging in the private sector.
Providing some recommendations, he called for investments in existing taxes to close the gap between formal workers who pay majority of taxes and players in the informal economy.
“If you really are a country that wants to invest and make sure that you will get the right taxes, let me remind you it is not about more taxes, but is rather about investments into making sure that we close the tax”.
He maintained that effectively closing the tax gap will not only improve revenue collection but will strengthen the tax administration system.
Speaking on the same show, Economist at the Institute of Statistical Social and Economic Research (ISSER), Prof. Charles Ackah said government must find a better way of taxing the informal economy where much income is generated but unaccounted for.
Citing an example, Prof. Ackah revealed that there are more workers in the informal sector earning more than university lecturers, and yet pay no income taxes.
Such a development, he said is a disincentive to the few in the formal economy who pay taxes to the government.
“There are barbers in Ghana who earn more than ¢5,000 a month and yet they are not taxed. Compare that to a nurse or a teacher who earn less than that but is taxed. How can the system tax a cleaner at the university who earns about ¢800 and ignore a barber, a mechanic and all the informal workers who earn more”, he said.
Source:Myjoyonline.com
The Member of Parliament for Nsawam Adoagyiri, Frank Annoh Dompreh, has expressed concern over delays in the release of the District Assemblies Common Fund, warning that the situation is stalling development across the country.
On his facebook page, he described as a matter of urgent national importance, the Minority Chief Whip pointed to what he sees as a growing crisis of unpaid contractors, abandoned projects, and halted infrastructure works in many districts.
He noted that several communities are grappling with half completed schools, unfinished health facilities, abandoned markets, deteriorating roads, and stalled sanitation projects.
According to him, many contractors who have executed projects for district assemblies have not been paid, forcing some construction firms to demobilise from sites while workers lose their jobs.
He stressed that the District Assemblies Common Fund is not a discretionary allocation but a constitutional requirement under Article 252 of the 1992 Constitution, intended to support development at the local level.
In his view, years of delayed releases and accumulated arrears have weakened district development financing and disrupted projects meant to improve living conditions in communities.
He further argued that some payments made in recent years were largely the settlement of old debts rather than funding for new or ongoing projects, a situation he believes has affected contractor confidence and local economic activity.
He described the issue as more than a budgetary challenge, characterising it as a development emergency and a governance concern.
He therefore urged the appropriate authorities to pay outstanding DACF arrears, settle contractors who have completed their work, and ensure that transfers to districts are automatic and predictable.
He maintained that decentralisation can only succeed when district assemblies receive adequate and timely funding to carry out development projects.
He emphasised that stalled projects directly affect ordinary citizens, since they rely on such infrastructure for education, healthcare, transportation, sanitation, and economic activities.
He called for renewed attention to grassroots development, insisting that national progress should not be concentrated only in major cities but extended to all communities.
By: Jacob Aggrey
Richard Appiah, the footballer who killed two children and stored part of their bodies in a fridge at Abesim in the Bono Region in 2021 has been handed a lifetime sentence.
This was after a five member panel of judges at the Accra High Court returned a verdict of guilty against the convict.
Appiah, 32, also a draughtsman would spend the rest of his life in prison after he was convicted of murder.
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BY MALIK SULLEMANA
