Adnan Adams Mohammed
A former Finance Minister is advocating for a holistic tax system reforms to reflect transparency, efficiency, and the long-term financial health of Ghana.
The former minister believes that, an improved tax collection mechanism; such as, automation and integration of income tax and VAT files, could result in an increased in revenue.
Speaking in an interview after a presentation on Ghana’s International Monetary Fund in Accra last week, he questioned the delay in implementing the tax system digitisation, stressing the need for an efficient domestic Information Technology (IT) system for the Ghana Revenue Authority (GRA).
Seth Terkper, further revealed the complexities of Ghana’s tax system and proposed reforms for a more efficient and transparent structure. According to him, Ghana has four tax regimes namely: Income Tax, Excise Duty, Petroleum Tax and Import Duties.
He emphasised the importance of focusing on the four core taxes – income tax include: personal income tax, corporate income tax, and VAT, adding these are the pillars of the country’s revenue regime due to their broad tax base.
Petroleum taxes are the levies put on products, adding that excise duties are punitive and usually put on products such alcohol and cigarettes, among others.
On the concerns of increasing number of levies, he asserted that they contribute less than 6% to overall revenue and distort the primary tax system.
He thereby called for transparency in the introduction of new taxes and urged a return to the core pillars for the tax regime indicating that, certain levies are distorting the tax regime and encouraging tax evasion and avoidance.
Mr Terkper recommended clearing unnecessary levies and focusing on the fundamental tax pillars for sustainable revenue generation
