Dr. Magnus Ebo Duncan, the Director of Policy at Institute of Fiscal Studies (IFS), has said fiscal policy has been the primary key for government to engineer income distribution in the country.
He said this in his address on inequality through government fiscal policies at a stakeholders engagement on addressing inequality through a harmonised national identification system in Accra, organised by African Centre for Energy Policy (ACEP) and supported by Oxfam.
According to Mr. Duncan, fundamental to the widening inequality arising from the spending deficit is that, revenue mobilization through taxation has been low and aggressive. He said, even though, Ghana collected 55% of its tax revenue from indirect sources like VAT, Exercise duties and Customs duties, indirect taxes are still burdensome on the poor.
But then, he said, Ghana has a low tax GDP ratio of 15.2% as at 2016 as compared to the average for middle-income countries of about 22%. Revealing that, the GRA did not meet its revenue target in 2016, which is about the third time since 2008, and it is an indication that, overall revenue mobilization is weak to finance the pro-poor sector.
Mr. Ebo Duncan further stressed that, it is clear inequality can be a serious threat to social and political stability in developing countries and therefore, underscored the need for government and all stakeholders to work towards addressing inequality in the country by investing in the pro-poor sector such as Education, Health and Agriculture as well as accelerate the implementation of a harmonized national identification system.
On his part, Mr. Abdul Ganiyu, the Director of Training at the National Identification Authority (NIA), also noted that, the issuance of the country’s National Identification card would seriously boost domestic revenue mobilisation.
He said, a comprehensive national register would bring all Ghanaians to the centre through formalisation and digitisation of the economy in a way that would promote the easy way of doing business in the country, boost the efforts in domestic revenue mobilization and also enable the state to properly target citizens with development interventions.
Mr. Ganiyu further stressed that, for enhancing domestic revenue mobilization in particular, the NIA identifies the GRA as an important stakeholder to properly target individuals through access to the NIA database to enable them establish their income tax liabilities and ensure it’s paid to the state.
He said, exporters and importers holding the National ID card would be linked directly to their PIN, which would help eliminate fraud and theft in the shipping and clearing of goods at the ports and harbours.
Business registrations he said, would be linked to the national ID card holder’s PIN to help identify them as the true owner of a business, adding that, the Registrar General’s Department would make it mandatory for all business owners to provide their PIN on the card during business registration.
Saying, “this will make it easier for a national card holder to take a loan from the bank whether they work in an identifiable institution or not because his or her identity can be easily verified.”