The Executive Director of the Institute of Fiscal Studies (IFS), Prof. Newman Kwadwo Kusi, has said that the government needs to enforce a tax compliance system to ensure revenue mobilisation to enable it increase Internally Generated Funds (IGF) for sustainable development.
He has asked the government to improve upon the tax base as a means of strengthening and increasing the IGF of the country.
He was speaking at the BCA Annual Economic review forum organized by BCA, the Business Executive magazine and Movenpick Hotels and Resorts and other stakeholders with the aim of developing a strategy for business growth. It was on the theme: Deepening Government collaboration with the Private sector: The Role of Policy.
The IFS Executive Director was speaking on the topic: The 2018 fiscal policy objectives and target: What has changed?
He said the policy objective of the government towards strengthening the fiscal position through mobilizing substantial additional investment and revenue in rationalizing expenditure to create space for policy manoeuvre has eluded government for the past years and continues to do so.
He argued that the country is faced with a high risk of debt constrains and this is causing the government to divert the IGF to service debts because, according to him, government spents over 40 percent of its tax revenue to service debt which has resulted in lack of infrastructure development in the country.
“It is implying that the total domestic revenue of Ghc24.3 billion mobilized during the year was completely absorbed by debt,” he added.
Prof KusI said the IMF repeatedly complained about the country’s high debt constraints because the debt stock increased drastically within the first half of the year.
“Ironically, the public debt stock which stood at GHS 142.3 billion in December 2016 has increased to GHS 159.4 billion in July this year,” he noted.
He said the IFS has made some recommendations to enable government increase the tax net in the medium term which includes rolling most of the informal sector into the tax net, retooling of the Airforce for revenue collection and monitoring, adequate resource must be allocated to the District Assemblies to enhance collection of property rate.
He also called for digitalization of various areas of the economic and enforce the use of Tax Identification Number (TIN) for the collection of taxes adequately.
The IFS Executive Director added that with the limited fiscal space, it is important that the government take restrictive measures to cut down on excessive spending on travelling, entertainment, subsidy and allowances within the public sector.
“It is equally important that government introduces the Cargo Tracking Note (CTN) and also spend prudently and efficiently on the IGF to promote national development.”
He therefore asked for the review of some government initiatives and programmes like the nurses allowances, the free SHS and other social intervention policies to minimize the rate of expenditure and develop a data base system that would capture all taxpayers for revenue mobilisation.
The forum brought together politicians, dignitaries and personalities in both the private and public sector to speak on various topics for economic growth.
Source: Nii Aflah Sackey