Control of 55% of extractive sector to earn gov’t GHS 25bn each year – Economist
Economist at the University of Ghana, Dr. Adu Owusu Sarkodie, has noted that the country is likely to earn about GHC25 billion every year if government controls about 55% of the extractive sector.
Similarly, the review of the country’s tax exemption regime and the effective collection of property rates will give the nation a little above GHC 5m annually, with revenue from the aforementioned sources reaching about GHC30 billion each year.
According to Dr Sarkodie, these earnings are expected to boost the nations revenue significantly and improve the ailing fiscal economy.
Adding that, the country should have by now, moved into the upper middle status after achieving the lower middle income status somewhere in 2009.
“In addition to the government’s proposed e-levy and the review of the 50% benchmark values, there are other sources of revenue to government such as the review of tax exemptions, which is expected to bring in about 4.6 billion, the property rate which is expected to bring in about 1 billion and the natural resources sector which according to IFS, is expected to rake in 25 billion every year if government commands a greater share of the natural resources, that’s about 55% of the extractive sector.
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“You cannot raise revenue whiles there are leakages, therefore the government of Ghana must plug all loopholes and ensure prudence in management of the public finance. We all know that the auditor general and the public account committee of parliament always identify some financial irregularities in our public finances,” he said.
Meanwhile, Economist and Finance lecturer at the University of Ghana Business School, Prof Godfred Bopkin, is renewing calls for the tax exemption regime to be reviewed in order for government to rake in more revenue.
According to him, the tax exemptions granted can weaken the needed revenue to save government from introducing the electronic transaction levy.
Prof Bopkin made the assertion speaking at an economic forum on the e-levy organized by the Economic Governance Platform.
“We loose as much as we are able to collect, tax revenue is approximately 13% of GDP and Ghana looses as much as that. That actually, when you look at that, it’s in excess of GHS 77 billion in current terms, so what it means is that we could actually major on closing those leakages rather than majoring on a minor which is e-levy.
“That is where we need to focus our attention, if we don’t do that we can introduce an additional tax handle and it will still not solve the problem. We will be here. And why am I saying so…. is it not 1.75 or 1.5?, last year government introduced covid levy of 1%, sanitation levy we prayed to God and then we moved on. But this one we are not only praying but we are taking some practical steps that it doesn’t happen. so review tax exemptions regimes,” he said.
