Business News of Thursday, 5 August 2021
Director of the Institute of Statistical, Social and Economic Research (ISSER), Professor Peter Quartey has raised concern over Ghana’s revenue mobilization efforts.
Prof. Quartey believes mobilization efforts have rarely improved and fell short of its target as data available suggest the overall fiscal deficit of Gross Domestic Product fell slightly short of its target of 5.2 percent for the first six months of 2021.
Speaking at ISSER’s post-budget analysis on Monday, August 5, 2021, Prof. Quartey called for a holistic approach to ensuring taxes effectively are collected so as not to be a ‘nuisance’ which in the end affect private business.
“For me what is more critical is the new taxes that were introduced. We want to access them to see whether they are yielding the required revenue. Are they efficient? At the moment it is below the target and, I think, by the end of year we should know whether they are doing well or not and whether we should scrap some and introduce new ones.”
“We have to strike a good balance between tax revenue and non-tax revenue. Unfortunately, we have concentrated too much on the tax revenue. We have not done so well in raising revenue through non-tax measures like the state enterprises and other things. We usually focus on the tax revenue because, certainly, VAT and other levies are quicker ways of colleting revenue. But as to whether they are yielding the needed revenue for government to stimulate the economy or whether they are affecting businesses, we are yet to know,” he said.
Professor Quartey implored government to ensure its expenditure was kept in check in a bid to narrow down the fiscal deficit target which has been pegged at 9.4 percent of GDP.
“If government can raise the projected revenue above its programmed target and ensure that the expenditure envelope is intact, then the economy can outperform the revised fiscal deficit of 9.4 percent for 2021. This will invariably be a giant step in returning to the path of fiscal consolidation even before the expected date of 2024,” he said.