Finance Minister Ken Ofori Atta is optimistic that the projected tax-to-GDP of 20 percent from the current 13 percent will materialise if government increases revenue mobilisation and harnesses a digitalised economy.
This, the minister said, when attained will enable government to raise funds to support the recently announced GH¢100billion Ghana CARES Obaatanpa programme that seeks to revive the economy from the shocks of effects from the COVID-19 pandemic.
“Going forward, we all have to sacrifice and embed and share that revenue mobilisation supported by a digitalised economy will ensure that our current 13 percent revenue to GDP will increase to 20 percent of revenue to GDP. This will enable government to raise the GH¢30billion to support the GH¢100billion Ghana CARES Obaatanpa programme.
“In addition, the much-vexed areas of property taxes and tax exemptions will be fast-tracked to support our GH¢30billion raise,” Mr. Ofori Atta said in his concluding remarks on the debate of the mid-year review of the 2020 budget and supplementary estimate in Parliament.
Commenting on the GH¢11.8billion supplementary budget that the House approved on thesame day, the minister gave a breakdown of expenditures that the money will cover.
“Let me restate what the GH¢11.8billion supplementary estimate includes an amount of GH¢1.84billion that Parliament approved in March 2020 for emergency COVID-19 related expenditures as requested for. GH¢1.34billion is for implementation of the COVID-19 Preparedness Plan 1 and 2 to be implemented by the Ministry of Health – a plan to focus on expanding laboratories and increasing the network of functional laboratories for COVID-19 testing for improved database management and coordination; creating isolation centres in all regions and districts; revitalising the systems for tracking case confirmations and case management among others.
“It also covers GH¢600million to mobilise for construction for the ‘Agenda 111’ district hospitals; GH¢1.204million for the CAP One programme which includes the GH¢600million support for small businesses, relief for water during the first three months, support for frontline workers, etc.,” he listed.
The minister further stressed government’s commitment to prioritising the wellbeing of Ghanaians through its economic transformation agenda and interventions it is carrying out in the pandemic period.
Meanwhile, the Institute for Economic Affairs has projected in its analysis of the 2020 Mid-Year Budget Review that the country’s tax revenue will remain within 13 percent of GDP by 2023, claiming that Ghana’s target of achieving tax-to-GDP of 20 percent in the period is unrealistic unless the country’s tax collection and administration are improved significantly.