"VAT could fetch GHS 2bn annually for state if rules are enforced

" \n VAT could fetch GHS 2bn annually for state if rules are enforced - Prof. Bokpin \n \n\n \n An Economist and senior lecturer at the University of Ghana Business School, Prof. Godfred Bokpin has urged government to explore the potential of tax handles like Value Added Tax (VAT) which he reckons could fetch the GHc2bn annually for the state. \n \n\n \n According to him, government should be looking out for \u201clow hanging fruits\u201d to tap into to create fiscal space without burdening the faithful few. \n \n\n \n Speaking at a Review and Compliance of the Public Financial Management Laws in Ghana workshop last week under the auspices of the Natural Resource Governance Institute in Accra, he said, \u201cIf you pick VAT alone and look at its potential we are doing just around 55 percent of that so close to 45 percent is attributable to inefficiency, so it means that VAT since it was introduced, has raised a lot of revenue, there exist a lot of potential to rake in more revenue, more than GHc2bn annually by enforcing the rules to the latter and ensuring that exemptions and some VAT exemptions done with politically connected transactions or politically exposed are actually dealt with.\u201d \n \n\n \n Prof. Bokpin bemoaned the low tax level in the country compared to its neighbours, citing that the country\u2019s tax effort is around 12 to 13 percent as opposed to peers who are doing close to 18 to 20 percent.\u00a0 \n \n\n \n For him, it means that there is space, unutilized tax capacity that can be closed to inure to the country\u2019s advantage without burdening the faithful. \n \n\n \n \nhttps:\/\/norvan.soscodesoftware.com\/gold-purchase-programme-bog-revise-target-from-10000-oz-to-217000-oz\/\n \n \n\n \n \u201cWhen you do your tax capacity analysis or tax potential analysis and relate that your current tax performance you are asking yourself the gap, does it exist at the policy level or exist at the administrative and compliance level, if they exist at the policy level the tools to be deployed are different, gaps that exists at the administrative level, the tools to be deployed are also different. \n \n\n \n \"If they exist at the administrative level, you don\u2019t close that gap by introducing additional tax handles like we have done in the case of e-levy, you want to ensure greater compliance and efficiency within the existing tax handles \n \n\n \n \"So, when you do your tax take analysis and look at optimal and where they are now, and the depth and the gap -how do we close it, you either close it through administrative reforms, greater compliance and enforcement and digitisation and that could rake in a lot more money,\u201d he explained. \n \n\n \n He outlined measures from expenditure rationalization and revenue side, as well as inefficiencies in our public investment side as some of the ways government can look to generate revenue. \n \n\n \n Apart from VAT, he indicated that Corporate Income Tax can also be exploited \u201cwhen we scale it up by 35 percent without burdening the faithful few.\u201d \n \n\n \n Ghana has just been downgraded by Fitch Ratings from B- to CCC. \n \n\n \n The country\u2019s inflation rate also hit 31.7 percent in the month of July 2022. \n \n\n \n Fitch expects a deal with the IMF to be in place within six months. \n \n\n \n It also estimates that Ghana could benefit from as much as $3 billion and unlock budget support from other multilateral lenders. \n \n\n \n The IMF concluded a fact-finding mission to Ghana in July in which it met with key stakeholders like the Vice President, Finance Minister and the Bank of Ghana. \n \n\n \n Prof. Bokpin feels Ghana is currently in a tight situation and \u201cwe need to take a critical look to salvage the situation.\u201d \n "

"VAT could fetch GHS 2bn annually for state if rules are enforced

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