Government is hoping that a full implementation of its digitisation drive next year would facilitate tax compliance and payment by Ghanaians.
Out of a total of 4million people active in the formal sector, just about 1.3m currently pay their taxes, estimated at some GH¢3.5billion.
Finance Minister, Ken Ofori-Atta, speaking to the B&FT shortly after Parliament adopted the 2018 budget and financial policy statement of government on Tuesday said government will leverage all three digital platforms next year to increase tax revenue to GH₵5billion.
The Akufo-Addo government, since assuming office, has invested heavily in the full operationalisation and implementation of the “Ghana Card”, the country’s new national ID; the National Digital Property Addressing System; and an Interoperable Electronic Platform for the payment of goods and services across the country.
According to Finance Minister, Ken Ofori-Atta, a key priority for government next year is the issue of revenue mobilization; of which the three electronic platforms are to serve as the key catalysts.
“So all in all, you are beginning to see our capacity as a nation to grow beyond aid and to be able to support ourselves, so whether we as a nation will begin to address ourselves honestly and for all of us, to come to pay what we are supposed to pay and for the government machinery [GRA] to make it easy and simple for people to pay taxes.
Our expectation is that the addressing system, national ID system will get all of us hooked into an electronic platform which would encourage tax payment,” he said.
Furthermore, he explained that presently the country’s revenues, which stands at GH₵41bn, represents about 24percent more than last year. But, he noted, “It’s still just 16% or so of our GDP and countries in a comparable size, lower middle income, we really should be doing about 22% of our GDP, so it shows that either we don’t have a robust system to collect or too many of us are not paying our taxes”.
He also added that there is also a revenue shortfall of GH₵10bn out there that has not been collected, and reckons if the VAT records had been efficient, penetration should hit 20% from its current 11% which could have earned the nation about GH₵7billion.
The Minority, which opposed the budget statement since it was laid in Parliament, abstained from the vote.
The various Committees in Parliament will now be tasked with assessing the estimates and allocations made to the various sectors in the budget.
The budget highlighted results from the government’s policy programmes over the past few months, and announced the government’s planned developmental programmes for the next fiscal year.
Among the major programs to be rolled out by the government in 2018, are tax reliefs for private universities, tax holidays for young entrepreneurs, proposed 13% to 21% reduction in electricity tariff for residential consumers, the establishment of nation-building corps and operationalization of the Special Prosecutors’ office.
The budget, themed: ‘Putting Ghana back to work’, focuses mainly on revenue mobilization through strict tax collection modules and job creation.