They said what it required was increased tax compliance, efficient and effective revenue mobilisation strategies and the aggressive plugging of leakages to help shore up revenue and relieve the economy of the current burden.

Consequently, the economists, Dr Sam Ankrah of the Africa Investment Group, Prof. Godwin Alufar Bokpin of the University of Ghana Business School (UGBS) and Dr Said Boakye of the Institute for Fiscal Studies, told the Graphic Business in separate interviews that ongoing negotiations with the International Monetary Fund (IMF) for a fund-assisted programme must exclude new tax handles or hikes in existing ones.

Beyond being an ineffective strategy, the experts said consumers and businesses were too fatigued by the current challenges that raising tax bands or introducing new ones would be “fatal”.

The three were sharing their thoughts on the revenue mobilisation strategy that should be adopted to help guide the economy out of the current predicaments.

Burden sharing

The country requested a fund-assisted programme in July after the currency suffered steep depreciation and price increments hit a new high.

Since then, two IMF teams have visited and held discussions with the government, after which both sides have given an assurance that the first of a two-level agreement for a bailout programme will be reached by the end of the year.

Although a source of relief to the economy, many are concerned about the ripples of the imminent fiscal consolidation exercise that characterise every IMF programme.

In recent times, the Minister of Finance, Ken Ofori-Atta, has also asked Ghanaians to prepare for burden sharing as a way to help stabilise the fiscal situation.

Sharing his thoughts, Dr Ankrah, who is also a Fellow of the Institute of Chartered Economists Ghana, said while burden sharing was unavoidable, it should not be limited to only tax increments or the introduction of new ones.

He said any attempt to shore up revenue generation through new taxes and/or hikes in existing ones would “be fatal for an already ailing economy and struggling businesses”.

He said ensuring effective tax compliance was what the country needed at this time to help increase the tax-to-gross domestic revenue (GDP) ratio from the present 13 per cent to almost about 20 per cent as pertained in other jurisdictions.

“We have allowed too much of what is due the state to leak away because we are simply not efficient at collecting taxes.

“I cannot understand why in this present day and age, our tax collectors go inspecting the books of companies and businesses to see if they are tax-compliant,” Dr Ankrah said.

He said there was the need for the Ghana Revenue Authority (GRA) to totally automate its processes to help reduce the human element.

Tax stamps

In line with the need for automation, Dr Ankrah said the GRA would improve tax collection if it replaced the physical affixing of tax stamps on excisable goods with an automated system.

“Now, people are going to other countries to print better quality of the band rolls and affixing them to drinks in bottles and cans ostensibly to indicate that taxes have been paid, but that is not the case,” he said.

The economist said what was needed was for the GRA to use encrypted codes which would fully disclose every information needed on the product.

That, he said, would, among other things, ensure that the GRA collected what was due the State.

Widen tax net

For his part, Prof. Bokpin said while increased revenue was critical to stabilising the economy, introducing new taxes was unnecessary as the country had more than enough tax handles.

“What we need is to efficiently and effectively ensure tax compliance,” he said.

He said there were fewer individuals and institutions that were paying taxes and they needed not to be further burdened just because of their ability to pay.

He said the government needed to introduce and effectively implement an efficient tax compliance system that allowed many eligible taxpayers to pay.

Prof. Bokpin wondered why the Tax Exemptions Act was yet to be implemented in spite of the numerous financial challenges the economy was faced with.

He said the political interference in the system that allowed only a few to bypass the tax structures must end with immediate effect if the government was to make inroads with its collections.

Tax filing

Dr Boakye of the IFS said he did not expect the IMF programme to lead to new taxes or hikes in existing handles.

Instead, he said he expected the programme to emphasise on increased compliance to tax filing.

“The IMF should ask GRA to be a little more aggressive. They should increase supervision of GRA in the setting of tax targets and encourage a stronger bond with the Ministry of Finance,” the economic researcher said.

“They can also review the tax concessions and make them more productive. They may allow some changes in the fiscal regime in the mining sector, but I doubt if they have the willpower to call for a complete overhaul,” Dr Boakye said.

He also appealed to the IMF to introduce foolproof mechanisms that would reduce the corruption and wastage in the system to help save state money.