Connect with us

Opinions

We don’t need more taxes to develop Ghana [Opinion]

Ghana currently needs rapid development across a number of fields which means, we also need a lot of money. We need to bridge the budget deficits, which stands at GHS 37 billion in the 2022 budget. We have to find ways of raising this money without going for loans, because already, we have an unsustainable debt to GDP ratio of about 83% which in nominal terms in over GHS 347 billion. So how do we raise the money that we need to develop now? Through taxes? Well let’s look at the tax situation in Ghana.

The tax to GDP ratio in Ghana is below 13%. That is to say that, out of all the money Ghana has, less than 13% comes from tax. Togo’s tax to GDP ratio is 22.2%, South Africa 28.6%, France 46.2%, Germany 37.5%, UK 33.3%, Senegal 22%, Burkina Faso 18.1% and Côte d’Ivoire 17.4%. So essentially, we could say we pay less taxes in Ghana. But is that really the case?

Ghana generates in excess of about 4458.67 GHS Million in taxes every year. That’s a good amount of money to solve most of our challenging problems. An amount of 2.4 billion cedis is generated every year into the road fund. Taking it that each kilometre of asphalt cost 1.5 million Ghana cedis. Dividing 2.4 billion by 1.5 million will give us 1600km of road. This means that every year, Ghana should be able to build at least 1600km of road from the road fund alone. For a better understanding, Accra to Kumasi is just 248km. We can build more than that every year from just the road fund. So the problem may not be insufficient taxes.

We are told that the Momo tax will generate a total of GHS 6 billion every year for Ghana compared to the GHS 78 million generated by road tolls. Ironically, according to the Auditor General’s report, Ghana lost GHS 12.8 billion to various forms of corruption and financial misappropriation. So funnily enough, we threw 2× the monies we want from the E-Levy into the pockets of a few, and want to get half of that from Ghanaians. Ridiculous! Anyways, we also lose quite a lot of money as a country to tax evasion and exemption. Only in 2020, 2 companies (just 2 companies), evaded taxes to the tune of GHS 1.2 million, according to Auditor General. Tax exemption also costed us millions.

So the problem clearly cannot be Ghanaians not paying enough taxes or Ghana not getting enough money. It’s simply our inability to properly collect all monies due the country in terms of taxes and making judicious use of them. Guiding against corruption and misappropriation should also be our priority. Because if we lose double of the amount we expect from Momo tax, then what’s the essence of introducing it and not protecting what’s available? Get much more secured ways of generating revenue, make good use of it for the people to benefit and wait for them to be willing to pay more taxes. After all, CDD tell us that Ghanaians are ready to pay more taxes only if they will be used properly

Nana Asante Bediatuo appointed Ambassador-at-Large.

News

Allan Kyeremateng proposes 5 years presidential team.

News

Don’t violate closed season rules – Fishermen told.

Business

Connect
Newsletter Signup