THE Finance Minister, Mr Ken Ofori-Atta, has observed that taxpayers are likely to renege on their civic responsibilities in an environment where naked corruption thrives.
He has, therefore, pledged government’s efforts to help stamp out the canker to restore confidence of the populace in the tax administration system.
At the joint conference on revenue mobilisation for representatives from select African countries in Accra, the minister said every government had a social contract between it and taxpayers.
For this social contract to remain relevant, he said it needed to be renewed through credibility in the usage and application of revenue raised.
On the efficiency in revenue administration and blocking tax revenue leakages, he said the government had recognised the need to work with the GRA to improve voluntary tax compliance through better front-line services and enforcement.
He also pledged to deploy technology into tax collection “in a way that reduces administration costs and the burden of tax compliance”.
“On the policy side, digitising administrative tax data could enhance tax policy analysis, including understanding the distributional effects of potential or existing tax policy measures,” he added.
“Taxation is an important tool for building good governance and the formation of a social contract between governments and its citizens.”
“Where there is evidence of continued misuse of tax revenues or open corruption, the social contract is broken and the efficacy of the nation’s entire tax system is questioned by taxpayers,” Mr Ofori-Atta said at the conference on “Moving Beyond Aid — Revenue mobilisation.”
The two-day conference attracted representatives from countries which had signed onto the G20 Compact With Africa (CWA), including Benin, Ethiopia, Guinea, Morocco, Togo, Tunisia, Cote d’Ivoire, Egypt, Rwanda and Senegal.
It was organised by the Africa Centre for Economic Transformation, with support from the Ministry of Finance and the International Monetary Fund (IMF) to help deliberate on how member countries could improve tax collection and administration for revenues to increase.
The idea was to prepare the countries towards the dependence of less aid.
The minister commended the organisers for the conference and said the government’s quest to move Ghana beyond aid would be a gradual and challenging process.
This, he said, made “gatherings such as this crucial” and expressed the hope that the conference would provide strategies and ideas to boost domestic revenue mobilisation.
He said Ghana had witnessed improvements in domestic revenue mobilisation efforts over the past decade.
He said tax revenue relative to total economic output, measured by gross domestic product (GDP) had increased from about 12.7 per cent in 2006 to 16.3 per cent in 2017.
“But this is still well below the average of our lower middle-income peers, which is over 20,” he said.
Enumerating some of the measures the government was using to improve mobilisation, Mr Ofori-Atta said the drive for most developing countries, including Ghana, to set up an efficient tax system was fraught with formidable challenges.
“We believe that as a government we must tax smarter and not harder, and to achieve this goal, the government must endeavour to expand its tax base.”
“For instance, though estimates point to the existence of about six million potential individual taxpayers in Ghana, only about 1.5 million are formally registered with the Ghana Revenue Authority (GRA). Of this number, 1.36 million are employees, implying that many self-employed individuals are not registered with the authority,” he said. — GB