Finance Minister, Ken Ofori-Atta has stated that the 2018 budget which will be presented in parliament later this month will use innovative ways to improve domestic revenue collection for economic development.
This follows calls from the Institute of Fiscal Studies, urging government to use the 2018 budget to improve tax collection by broadening the tax base.
Speaking at the 38th Annual Technical Conference in Accra, Ken Ofori-Atta stated that it is important to improve tax collection since Ghana’s tax to GDP ratio is below what is required for economic development.
He hinted that improving domestic revenue is one of the critical areas that the budget will address.
“We are in the middle of our tax budget season and the budget will be read on November 15th and the challenges are obvious to us in terms of where we are as a nation,” he observed.
“Currently tax to GDP is about 16 percent which is much lower in terms of where we are as a nation which is much lower than it should be since we should be looking at about 22 to 25 percent and that possess a challenge,” he said.
Giving some figures, Mr. Ofori-Atta pointed out that the tax compliance among the informal sector is too low despite the economic activities generated in that sector.
This, he said has put the tax burden on a few workers in the formal sector, affecting government’s revenue projections.
“We have a situation where about 4 million people in the formal sector and about 1.1 million are paying taxes of about 3.5 billion”.
GRA targets 40bn domestic revenue
Meanwhile, the Ghana Revenue Authority (GRA) has hinted that it may target over 40 billion cedis revenue generation in the 2018 budget to boost government revenue base.
The Commissioner General of the Ghana Revenue Authority (GRA), Emmanuel Kofi Nti stated that the authority intends to improve its operations to meet the target.
Source: Citi Business News