Government must introduce innovative tax and revenue strategies in the mid-year budget review to shore up its revenue, A Senior Lecturer at the Economics Department of the University of Ghana, Dr Eric Osei-Assibey has said.
Speaking in an interview with the Ghanaian Times yesterday he said the development of the country was a dual responsibility of government and the citizenry.
To this end, he made some recommendations that the government must follow if it were to achieve its developmental goals.
According to him, it has become necessary for the government to introduce additional revenue and tax policy measures to rake in more funds to sustain the macro-economic gains made in the past year and also finance infrastructure development.
Dr Osei-Assibey who is also a Senior Fellow at the Institute of Economic Affairs (IEA), stressed the need for the government to impose excise tax on the use and importation of all ;forms of plastic materials.
That, he said, would boost government revenue collection and improve environmental conservation through improved sanitation, saying this is "being done in many other developing countries like in Kenya."
Dr Osei-Assibey also emphasised the need for government to increase the Value Added Tax (VAT) to 18.5 percent and ring-fence the proceeds to fund the flagship Free-Senior High School Policy.
"The government needs money to sustain this policy. We need to sacrifice now," he said.
He also said the VAT threshold should be reviewed downwards to incorporate more companies in a bid to broaden the tax net.
He said "Given the volatile nature of oil revenues, this will ensure sustainable financing and to ease the heavy fiscal burden that will be imminent in the near future when the full program is rolled out. I believe every social policy measure must be paid for by citizens either directly or indirectly to ensure sustainability. It this is well communicated to the Ghanaian people, I believe they will generally embrace it."
The Senior Lecturer also suggested that some marginal tax on mobile money transactions, e-business/on-line transactions and some sophisticated financial services would go a long way to enhance government revenue.
"As a medium-term measure, the government must be digitised the tax payment system in the informal sector by deploying mobile money tax payment system to increase efficiency in tax collection and compliance," he suggested.
On property tax, Dr Osei-Assibey stressed that payment of property tax must be made compulsory for all property owners, and suggested that a Special Court should be set up in all the districts to prosecute defaulting property owners to serve as a deterrent to others.
He noted that the National Builders Corps workers could be used to collect the property tax.
The Senior Fellow at IEA further suggested that Private Income and Corporate Income Tax, particularly on some selected businesses such as the Oil Marketing Companies, Mining and Telecommunication should be reviewed upwards, adding that special profit levy should be imposed on some selected companies such as bottle water produces, financial and insurance companies.
He said efforts should be made to intensify the Tax Stamp collection from micro and small enterprises to close the tax gap in the informal sector.