Finance Minister, Ken Ofori-Atta, has dismissed concerns that the government is imposing excessive taxes on businesses, stating that most Ghanaians are not paying their fair share of taxes. He revealed that Ghana’s current revenue to GDP ratio is only 13%, significantly below the expected 20%, indicating that about a third of the taxes that should be paid are not being paid.
Making the assertion, Mr Ofori-Atta highlighted the introduction of the e-VAT system as an example of how the government is addressing tax evasion. The system revealed that one company was reporting sales of 342,000 cedis a month and paying just 40,000 cedis in VAT, while it actually had sales of 158 million cedis a month and paid 19.8 million cedis in VAT after the system was put in place. The Minister’s comments suggest that some businesses may be evading taxes by underreporting their sales and revenues.
The Finance Minister’s comments come in the wake of protests by the Ghana Union of Traders Association (GUTA) and other business groups over what they describe as excessive taxes, which they say are stifling their operations. Some have even threatened to shut down their businesses if the government does not address their concerns. However, Mr Ofori-Atta believes that the introduction of new tax measures is necessary to ramp up revenue mobilisation, particularly following the country’s obstruction from the international capital market.
The Minister’s view is that Ghana needs to generate appropriate taxes to fund the budget and help the country achieve an 18-20% revenue to GDP ratio, which he believes will help ease the burden on businesses. He is also optimistic that as the country’s economic situation improves, some of the taxes will be removed to encourage growth and expansion.
Mr Ofori-Atta’s statements reflect the government’s commitment to reducing tax evasion and increasing revenue generation, which is crucial for achieving sustainable economic growth. However, there is a need to balance the government’s revenue mobilisation efforts with the interests of businesses and other stakeholders. Excessive taxes could have a negative impact on business operations, reduce investment and lead to job losses, which would ultimately undermine the government’s efforts to improve the country’s economic performance.
While the Finance Minister’s comments may seem harsh to some, they reflect the reality that Ghana needs to increase its revenue generation to fund its budget and achieve sustainable economic growth. However, the government must also find a way to address the concerns of businesses and other stakeholders to ensure that the country’s economic growth is inclusive and sustainable. Achieving this balance will require a collaborative effort between the government and the private sector, as well as other stakeholders.
Source: norvanreports.com