"Over 15 Tax Handles And Adjustments Introduced Post-COVID-19, Says Prof. Bokpin"

" Over 15 Tax Handles And Adjustments Introduced Post-COVID-19, Says Prof. Bokpin \r\n\r\nEconomist and Professor of Finance at the University of Ghana Business School, Prof. Godfred Bokpin, has raised concerns over Ghana's taxation approach, labeling it as overly complex and ineffective in boosting revenue.\r\n\r\nSpeaking during the NorvanReports and Economic Governance Platform X Space discussion on the topic \u201cFiscal Sustainability Amid Tax Cuts and Manifesto Promises,\u201d Prof. Bokpin highlighted that Ghana introduced over 15 tax handles and adjustments post-COVID-19, including the e-levy and COVID-19 health levy.\r\n\r\nHowever, these measures, he argued, have failed to enhance tax buoyancy or significantly raise the tax-to-GDP ratio.\r\n\r\n \"when it comes to the taxes, \u00a0 if you look at it from post-COVID, \u00a0 there have been over 15 different tax handles \u00a0 and tax adjustments in Ghana alone, and i n fact, it is the highest in the whole of Africa \u00a0 in terms of the additional taxes and the rate adjustments. But if you look at the period \u00a0 that we've had all these taxes, it has necessarily not improved the buoyancy of our tax system,\" h e i nt i mat e d. \r\n\r\n Excessive Tax Handles Undermining Revenue \r\n\r\nAccording to Prof. Bokpin, the proliferation of tax handles in Ghana\u2019s relatively small economy has created substitution effects, where new taxes simply replace rather than add to revenue streams.\r\n\r\n\u201cDespite all these new taxes and adjustments, our tax-to-GDP ratio hasn\u2019t improved the way one would expect, and the increase in tax buoyancy is negligible,\u201d he said.\r\n\r\nHe emphasized that additional taxes, including the e-levy, have not delivered substantial revenue, citing data that shows minimal returns relative to GDP.\r\n\r\n Compliance Costs Straining Businesses \r\n\r\nProf. Bokpin also spotlighted the mounting compliance costs imposed on businesses due to frequent tax adjustments. Financial institutions, he noted, have had to reconfigure systems repeatedly to accommodate new tax measures, including the e-levy.\r\n\r\n\u201cSince COVID, businesses have been reconfiguring their systems almost every six months just to remain tax compliant. The cost of compliance is becoming unbearable,\u201d he explained.\r\n\r\n The Case Against the E-Levy \r\n\r\nThe economist argued that eliminating the e-levy could boost mobile money (MoMo) transactions and promote economic formality. He observed a decline in MoMo transactions and a resurgence of checkbook and cash-based transactions, which were previously diminishing.\r\n\r\n\u201cEliminating the e-levy would increase MoMo turnover, enhance the profitability of telcos, and ultimately raise tax revenues. It would also enable greater financial inclusivity,\u201d Prof. Bokpin asserted.\r\n\r\nHe concluded that Ghana needs a streamlined tax system that focuses on fewer, more effective tax handles while reducing the burden on businesses and citizens."

"Over 15 Tax Handles And Adjustments Introduced Post-COVID-19, Says Prof. Bokpin"

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