If government wants to be effective at revenue mobilisation, it should employ services of the private sector to partner the Ghana Revenue Authority (GRA), Chief Executive Officer of Dalex Finance Limited, Kenneth Thompson, has urged.
His comments come on the back of insufficient domestic revenue which always leaves government with no option than to borrow – partly because the GRA lacks the capacity to efficiently collect all taxes in the system.
For Mr. Thompson, the private sector has proven beyond reasonable doubt to be more efficient and effective than government in any sector where the two operate. Hence, employing the sector’s services in revenue mobilisation efforts – as has been done in Nigeria – will help address the problem of revenue shortage.
“This is a country where the private sector has shown that it is more efficient at allocating resources than the government sector. Think of all the areas the private sector has been into – telcos, transport, hospitals, airlines, education and many others – it is the most efficient. Any form of revenue, if you can use the private sector to facilitate it, use them.
“The private sector has shown that it’s able to provide results because the people involved have skin in the game. They will make sure there is a result. A good example is that Lagos was able to generate a substantial amount of revenue so that it doesn’t rely on the federal government; and it did that with collaboration from the private sector,” he said in an interview with the B&FT.
Mr. Thompson added if the country wants things to change, it ought to use a different approach; and also, it cannot use the same approach and expect a change. “Some put out the argument that the cost of getting the private sector involved is high; but it would be more prudent to collect 100 and give 25 away than vice versa,” he added.
At the recently observed International Customs Day held in Accra, the GRA said it has set a tax target of GH¢80.3billion for the 2022 revenue collection year – where Finance Minister Ken Ofori-Atta in a statement assured that the ministry will continue to support the various initiatives of the GRA on its digitisation drive to ensure the needed revenue is effectively and efficiently mobilised.
Revenue shortage still a bane
The finance minister, presenting the 2022 budget, indicated that there has been a drop in revenue collections due to the pandemic, but the country is working to bounce back.
“Let me assure the House that we are working hard to get back quickly to the pre-pandemic fiscal and debt trajectory. The fiscal policies implemented to provide relief during the pandemic have led to an increase in total public debt. The situation was made worse by the big drop in revenue collections last year resulting from the pandemic. Total revenues in 2020 fell by GH¢11.93billion – equivalent to 3.1 percent of GDP, while total expenditures increased by GH¢14.08 billion – equivalent to 3.7 percent of GDP,” he said.