Government should strengthen revenue mobilization – IEA Ghana


The Institute of Economic Affairs Ghana (IEA Ghana) on Tuesday said the government needed to strengthen tax mobilization, especially in the informal sector, in the wake of the COVID-19 pandemic.

The institute said the informal sector contributed about 30 per cent of the country’s Gross Domestic Product (GDP), adding that, stretching out the tax net to the sector had the potential of increasing revenue to fund government’s expenditure.

These remarks were made at the institute’s review of the government’s Mid-Year Budget policy statement presented to Parliament on July 23.

Dr John Kwabena Kwakye, the Director of Research of IEA Ghana, said tax exemptions to certain persons and institutions constituted over GHC5 billion and called on Parliament to expedite the passage of a tax exemption bill which would curtail the menace.

He said, “One key area of revenue mobilization which could facilitate government’s expenditure which is mostly overlooked is taxes from properties we term property tax.

“This could be assigned to the assemblies, which would, in turn, generate funds for development at the local level”.

He reiterated that Ghana’s tax efforts were low and called on the government to track revenue leakages to increase the tax to GDP ratio.

Dr Dede Amanor-Wilks, the Executive Director of IEA, said it was important for the government to be concerned about meeting revenue shortfalls to grow the economy.

She said strengthening revenue mobilization was critical to building a resilient economy and called on the government to increase its industrialisation drive, adding that “industrialisation is a pre-requisite for development.”

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