Auditing firm KPMG has said the success of government’s bid to expand the tax net, among other things, will largely be determined by how well it employs the use of proper data.
According to a Partner at the firm, Andy Akoto, government needs to take a cue from countries like South Africa where it is impossible to access certain social services without the requisite identification card.
“What this would do is that it does not only allow government to deliver its social services, but also allow government to collect the useful data on especially people within the informal sector,” he stated.
Mr. Akoto, who was speaking at a KPMG post budget forum, in Accra, said: “we cannot talk about expanding the tax net when we don’t know where people live and what they do for a living.
There is no concrete database for planning and so the data agenda is clearly something that must be at the top of government’s agenda if we are going to expand the tax net; because what this does is that, it clearly identifies everybody and where they are and expanding access to credit will be easier; and a lot more people will be reined in into the financial inclusion agenda and thereby get more people to pay tax.”
Government has said it is keen on increasing the about 1.3 million people who pay taxes to include people in the non-formal sector.
According to the 2018 budget, although government projected tax revenue of GH₵23.9 billion by September 2017, it was only able to collect GH₵22.1 billion, leaving a shortfall of about 8 percent.
The shortfall in tax revenues translates into an overall underperformance of domestic revenue, which prompted government to cut its expenditure in order to keep to its deficit target.
But presenting the 2018 budget, Finance Minister, Ken Ofori-Atta reiterated, government’s desire to widen the tax net in order to boost revenues.
Driving the data agenda
Government recently launched the National Digital Property Addressing System which is meant to provide an effective means of addressing every location and place in the country, using an information technology application.
The portal, according to government, is expected to be integrated into the broader national identification system that will ensure that citizens are identified by where they reside as well as the sort of business they are engaged in.