A Tax Analyst, Timore Francis Boi, has said there will be no justification for government to introduce new taxes or increase existing tax rates in the mid-year budget statement scheduled to be delivered in July.
He says government must rather restructure the tax system to improve collection from areas that have been neglected for long, even though such economic actors are required to pay tax.
The Governor of the Bank of Ghana, Dr. Ernest Addison, in a recent address stated that the most important fiscal move to stabilize the economy is to improve revenue collection.
Speaking to Citi Business News, Timore Francis Boi said there is no room for an increment in taxes since COVID-19 has negatively impacted businesses.
“We are expecting something to be done to restructure the entire tax system so that taxes will be collected in areas that have been ignored. I am also expecting the GRA to be more strategic as we have seen the Minister recently inaugurate a newly created Tax Audit and Quality Assurance Department for GRA. So, for me the fear is that there is going to be a more aggressive and hostile way of collecting taxes for example in areas such as filing of tax returns because increasing a tax rate is going to be difficult,” he said.
The outbreak of the coronavirus pandemic has impacted government’s revenue as economic activities have largely slowed down.
In July, Finance Minister, Ken Ofori-Atta is expected to review some of the key macroeconomic targets announced in the 2020 budget which was targeted at expanding infrastructure, particularly roads.
He has already stated that the country is recording a huge decline in revenue from the port, petroleum revenue receipts as well as tax revenue due to economic slowdown caused by the pandemic.
He also said the COVID-19 fight could cost Ghana about 9.5 billion cedis which will take a toll on Ghana’s GDP growth, leading to an ultimate fiscal gap of 11.4 billion cedis.
Put measures in place to tax digital economy – Tax Analyst urges GRA
Tax Analyst, Dr. Abdallah Ali Nakyea, has also suggested to the Ghana Revenue Authority (GRA), to put in place the necessary measures to tax digital business transactions going forward.
He says this should enable the Authority to increase its revenue sources in order to meet or exceed revenue targets.
Speaking at the virtual business forum of the Citi Business Festival on Citi TV, Dr. Ali Nakyea said taxing the digital economy should reduce the burden on the regular businesses whose operations have been adversely impacted by the pandemic.