GH¢40bn revenue loss big blow to devt – Oppong Nkrumah

The Information Minister, Kojo Oppong Nkrumah, is worried that a GH¢40 billion revenue shortfall would stifle national development.

“The Economic Co-operation and Development (OECD) say that for a country like ours (a lower-middle-income developing country), our tax to GDP ratio should be about 24 or 25%.

“Currently, we are doing about 15%, so about 10% of GDP is not coming to the national kitty. That’s about GH¢40 billion,” he said.

“If we don’t get it, we can’t hire more doctors and teachers, pay contractors on time, expand the development programme,” he stressed.

Mr Oppong Nkrumah said this in an interview monitored by The Ghana Report on GTV’s Breakfast Show on Monday, August 2.

He explained that the 10% loss was primarily due to non-conformance to the payment of taxes, largely on the part of many professionals, including doctors, lawyers, engineers, computer scientists, financial service professionals and executives.

In addition to this is the disparity in the revenue generation on a regional basis.

According to the Ghana Revenue Authority (GRA), more than 80% of the country’s revenue comes from the Greater Accra region alone, which means little is got from the other 15 administrative regions.

Therefore, he said, “we have to be stretching ourselves a bit more because when we do, then we’ll have more resources to fund more of our development programme, and we’ll not have to borrow as much.”

GRA steps up game to raise more revenue

To this end, the minister indicated that GRA had started work aimed at closing the gap.

“For example, GRA has disclosed that there are about 33,000 identified professionals through the Ghana Card who are not known to the tax system. They (GRA) know this because these persons have national IDs now, but they can’t find them on the tax database,” he said.

This, therefore, makes it easy to reach out to such persons and engage them to make sure that they pay their taxes.

He also stated that GRA has rolled out several initiatives to ensure enhanced compliance in the tax administration system, including leveraging third-party data.

In this regard, GRA has done a cross-referencing of its tax data against institutions such as the Social Security and National Insurance Trust (SNNIT), Driver and Vehicle Licensing Authority (DVLA), and the Electricity Company of Ghana (ECG).

In addition to this is the integration of the Tax Identification Number (TIN) with the NIA card number.

Owing to this, GRA, on April 1, 2021, collaborated with the Registrar-General’s Department (RGD) together with the NIA to replace the existing TIN with the Ghana Card number.

The minister, however, expressed optimism about the country’s ability to meet the GH¢70 billion target for 2021.

2021 mid-year budget review

Touching on the mid-year budget review, Mr Oppong Nkrumah said the Finance Minister, Ken Ofori-Atta, did not request extra funds to spend because the fiscal framework that was put in place at the beginning of the year had made it so.

“Unlike in 2020, where the country was hit by the COVID-19 pandemic, therefore there was the need to adjust the fiscal framework, entering into 2021, there was a fair idea of what was going to be occasioned in the year.

So we were able to programme the revenues, borrowing, and expenditure properly. That is why the government believes it does need to raise extra resources. We are just a few percentage points behind our target, and in terms of expenditure, we are on track,” he stated.

READ ALSO: 2021 Mid-Year Budget Review: No New Taxes, No Additional Expenditure

Mr Ofori-Atta announced that the government would stay within the estimated GH¢ 111.3 billion expenditure for 2021 and introduce no new taxes.

He said this on the floor of Parliament when he delivered the government’s 2021 Mid-year budget statement and economic policy on Thursday, July 29, 2021.

He, however, underscored that the long stay of the third wave of the COVID-19 pandemic could adversely affect the country’s economic recovery and transformation.

Mr Ofori-Atta then urged all Ghanaians to observe the various safety protocols strictly.