Ghana Anti-Corruption Coalition (GACC)

The Ghana Anti-Corruption Coalition (GACC), has disclosed that, the persistent inability of a significant proportion of the Ghanaian population with the current poverty level of 21.4%, to access their basic needs, is largely attributed to the inability to mobilise adequate revenues and the poor management of limited revenues and sources of income mobilized by the country.

The coalition explained that, the inefficiencies in revenue mobilization and redistribution of public resources have been the bane of Public Financial Management (PFM) in Ghana.

Adding that, “To the loss of tax revenues through tax evasion and tax avoidance, a lot more revenues are lost through deliberate acts of corruption and tax maladministration.”

In line with this, the Coalition on Friday, 16th August, 2019, held an inception meeting in Accra to kick-start an Oxfam Ghana funded project titled: “Citizens Action for Improved Domestic Revenue Mobilization (DRM) for Pro-Poor Spending and Efficiency in Revenue Utilization”.

According to them, the project is aimed at empowering civil society, especially women and youth groups to actively advocate for progressive taxation and pro-poor spending in dialogue with government and private sector, aimed at reducing poverty and inequality in Ghana.

The meeting brought together stakeholders from the public sector and civil society to discuss the general approach of the project and as well harness their support for the project implementation.

It was also disclosed at the meeting that, there are other problems such as low rates applied to direct taxes, administrative challenges (because we are largely a cash-based economy) and companies not paying the right amount of taxes due to tax exemptions, deductions and incentives as well as the large informal sector population that goes largely untaxed on their incomes.

In addition to the loss of tax revenues through tax evasion and tax avoidance, a lot more revenues are lost through deliberate acts of corruption and tax maladministration.

This therefore, creates a situation whereby a small proportion of compliant tax payers are overburdened with the payment of multiple taxes that significantly reduce their real incomes, hence, increasing the inequality in the country.

The situation has also resulted in the government having to borrow excessively from both domestic and external sources, including commercial loans that attract very high interest rates, to make up for the short fall in development funding.

It is, therefore, not surprising that Ghana’s public debt reached 142.5 billion Cedis as at December 2017, though there was a drop to 69.8% of the GDP partly attributed to the rebasing of the GDP. A Trading Economics poll projected Ghana’s Debt to GDP ratio to be 69.7%, in March, 2018, showing a further drop though insignificant.

In the circumstances, the country finds itself reducing or even unable to spend on social programs, including health, education and small holder agriculture for vulnerable communities.

Unfortunately, it is the women and children, the primary beneficiaries of social programs, who often pay the price for weak/or and poor financial management, including fiscal indiscipline such as mismanagement of government funds, political expediency and outright corruption in some cases.

In many cases, they even have to go without these services. Both the current and previous governments have sought to address these problems through fiscal policies such as the introduction of new taxes and the removal of fuel subsidies which have meant that citizens pay higher and more taxes as well as increased fuel prices and public services.

Statutory funds such as the Ghana Education Trust Fund (GETFund), the National Health Insurance Fund (NHIF) and the District Assemblies Common Fund (DACF) used for delivering essential services at the local government level are not only inadequate but also often in arrears.

The situation is further worsened by the creation of new District Assemblies almost on a regular basis by successive governments. Also, government spending reinforces the inequality gaps by failing to redistribute resources from the rich to the poor which has resulted in Ghana being ranked 124th on OXFAM’s “Commitment to Reducing Inequality Index”.

Whereas the supply side of accountability leads the charge to fix the problems, an active demand side is necessary to keep the government in check and on track. Whiles CSOs have played very useful roles in getting the voices of citizens heard, their interventions have not engineered popular mobilization that is anchored on citizens’ appreciation of the social contract.

As tax payers on whose behalf vested authority is exercised, citizens need to be the prime movers in the demand for Fiscal Justice. Understanding the role of citizens as main contributors and in essence financiers of the public budget should create a sense of responsibility to oversee how well these resources are applied and spur the demand for stringent action on tax dodging and illicit financial flows.

Project Context

The weaknesses in tax administration have continued to allow potential tax payers both big and small to evade and/or avoid tax, hence, depriving the state of much needed revenues to finance development.

Apart from tax avoidance and evasion, tax revenue is often lost through acts of corruption such as deliberate tax maladministration, and low or non-collection of required taxes, which is fuelled by corruption.

The problem is that the effects of being unable to finance development and provide public social services tells most on women and children who are often the beneficiaries of such development interventions and social services, and other vulnerable persons.

In light of its vision of a corruption-free Ghana, GACC proposes to undertake this activity not only to help improve Domestic Revenue Mobilization but also ensure efficient and pro-poor spending.

The project is anchored on two main pillars of intervention:

a)To stimulate citizens dialogue and awareness of how corrupt practices stifle improved DRM opportunities and to make proposals for policy makers to adopt them; and,

b)To identify loopholes in tax administration and public financial management and build a constituency around the need for transparent and proper application to the pro-poor sectors (education, agriculture and health targeting women) for maximum public benefits.

These draw from the teething challenges on fiscal injustice and fed by the recent IMF calls for aggressive local revenue generation following the end of the Extended Credit Facility support to Ghana. Relative to its peers, Ghana’s tax to GDP ratio is low and thus justifies this project’s aims for realising more from tax collections.

GACC aims to achieve these two goals through the following set of activities:

•Identifying, creating and building the capacity of citizen networks for enhancing DRM and efficient pro-poor spending;

•Evidence-based advocacy on DRM and pro-poor spending;
•Engagements with policymakers on improving DRM and pro-poor spending; and,

•Launch an online platform aimed at tracking and reporting on government’s promises on DRM and pro-poor spending.

Prior to this project, GACC had worked with Oxfam to launch an index on the fiscal transparency promises of the ruling government during the 2016 elections.

This year, GACC would ramp up its efforts on this by transitioning this initiative into an online platform with a wider public reach. Further, commitments on natural resource management particularly on mineral revenue management would be introduced to the index.

The aim is to leverage current campaigns for a comprehensive mineral revenue management law similar to Ghana’s petroleum revenue management laws.

Gender Consideration

Women and youth groups will be particularly targeted by this programme as they will be most positively impacted by improved revenue mobilization but could also be negatively impacted by unjust tax policies and corruption in tax administration.

As such, women and youth groups will be mobilized for domestic revenue mobilization in selected districts. To make the grant implementation more inclusive, citizen groups and networks will be mandated to show evidence of women participation.

Women and women groups will be key to the citizen groups to be engaged for the activity. The voices of women will be heard in the advocacy messages as well. The overall aim is to ensure that women are a key part of, and benefit as much from the activity as any other set of beneficiaries.

Main Goal

The project’s overall goal is to ensure an empowered civil society, especially women and youth groups, actively advocating progressive taxation and pro-poor spending in dialogue with government and private sector, aimed at reducing poverty and inequality in Ghana.

The Specific Objective:

1.To develop and mutually agree, through multi-stakeholder dialogue – including civil society alliances – more progressive tax policies and efficient and pro-poor spending.

2.To promote innovative and sustainable policies for a transparent and more progressive Domestic Resource Mobilization (DRM)

3.To promote inclusive public spending aimed at improving the welfare of marginalized group, particularly women and children in Ghana and, hence reduce inequality.

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