- tighten tax laws on public servants’ benefits
- curtail unwanted exemptions
The Tax Justice Coalition Ghana (TJC-Ghana) has called on government to intensify its efforts at mobilising domestic revenue to help fill the revenue gap, considering the big financing gap that has resulted from the COVID-19 pandemic.
According to the coalition, this should include reinstatement of some revenue streams that were described as nuisance taxes; tighten tax laws on public servants’ benefits such as accommodation and fuel; as well as taking steps to tax the expanding digital economy and enforcing property tax.
TJC-Ghana also proposed enforcing the laws on rent tax and capital gains tax, as well as raising the corporate and marginal tax rates to at least 30 percent. “Government must also tighten and enforce the tax laws with regard to benefits in kind for public servants, including accommodation, vehicle, driver and fuel usages as well as entertainment, end of service benefits which affect only a few well-off individuals in the country.
“Government must also use more digital technology in tax administration, and curtail unwanted tax concessions, exemptions and waivers which have often been a drain on the country’s tax revenues,” the report read.
It stressed that the COVID-19 pandemic provides an opportunity for government to implement these suggestions without the political backlash they would have otherwise generated.
The TJC’s National Coordinator, Bernard Anaba, explained that considering the current state of the economy, a revenue stream such as the five percent Fiscal Stabilisation Levy is justifiable and should be left to stand. He also emphasised the need to increase the progressive income tax to at least 35 percent for high salary earners.
“Corporate organisations and even individuals are donating to government (COVID-19 Fund) because they believe the economy must be sustained and that will require all hands on board; and so, government must also consider some of these creative ways to widen the tax net and if possible increase where necessary,” he said.
Furthermore, TJC-Ghana is urging government to reverse its retrogressive action on the Petroleum Holding Funds (PHFs), whereby it amended the PRMA in order to access the Ghana Stabilisation and Ghana Heritage Funds on a permanent basis.
“The TJC-Ghana believes that if absolutely necessary, government should rather seek to draw on the funds through a loan request to parliament to be repaid instead – rather than the amendment made to the PRMA, making it a permanent feature which would have implications for the future,” it noted.
The TJC-Ghana however commended government for its actions in managing the COVID-19 impact so far, especially with the stimulus package – which they reiterated has presented an opportunity to rope-in more people and businesses who are showing up to register for the Taxpayer Identification Number (TIN) in order to benefit from the stimulus package. Nonetheless, it said government must follow-up with these potential taxpayers for expansion of the tax net.