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Government should boost domestic revenue without necessarily raising taxes,” said Prof. Quartey

Written by on June 19, 2024

As discussions around achieving ‘Ghana Beyond Aid’ gain momentum, Professor Peter Quartey, Director of the Institute of Statistical, Social, and Economic Research (ISSER), has urged the government to explore innovative ways of boosting domestic revenue without increasing taxes on Ghanaians.

Speaking on Joy FM’s Super Morning Show, the economist highlighted that digitizing the tax system would enhance efficiency in revenue generation and reduce human discretion in tax collection.

While acknowledging the efforts of the Ghana Revenue Authority (GRA) and other institutions in digitizing parts of the tax system, Prof. Quartey emphasized the need for further expansion to cover the informal sector.

“We must increase domestic revenue not by increasing taxes, but by enhancing the efficiency of existing tax systems. We have begun this process with digitization, which the GRA and others are implementing, and I believe we should deepen these efforts.

“We should also minimize human interaction. There is currently too much discretion involved in revenue collection in the country,” he remarked.

Mr. Quartey’s statement follows a keynote address by Member of the House of Lords in the United Kingdom, Lord Paul Boateng, during a leadership lecture at UPSA in Accra. Lord Boateng emphasized the need for Ghana to shift away from reliance on foreign aid, noting that dependence on external assistance hampers significant growth.

Echoing Lord Boateng’s sentiments, ISSER Director Professor Quartey suggested that enhancing domestic revenue generation could decrease Ghana’s reliance on external funding sources.

Furthermore, Prof. Quartey emphasized the importance of reducing government expenditure as another crucial step towards achieving financial independence for Ghana.

He emphasized that despite low revenue generation, the government consistently increases expenditures in its annual budget statements.

Pointing to budget statements from 2022 and 2023, he questioned the reasoning behind significant expenditure hikes amid revenue challenges.

“We also need to scrutinize our expenditures. I believe we aren’t achieving value for money, especially in procurement of goods and services.

“It’s perplexing that during challenging times like these, we’ve seen increases in expenditure, such as 42%, 30%, and earlier. One must ask, if revenue generation is a struggle, how can we address the aspirations outlined in the Ghana Beyond Aid vision? We must reassess our approach,” he emphasized.

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