Ghana must improve tax collection mechanism – Ken Thompson
Mr. Kenneth Thompson, Chief Executive Officer of Dalex Finance has advocated the improvement of Ghana in tax collection mechanism as one of the measures to improve investor confidence in the economy.
He said the inability of the country to collect more revenue to fund its budget was a contributing factor to the many reasons why Ghana was having a vicious cycle of going to the International Monetary Fund (IMF) without any permanent solution.
Speaking on the topic: “Navigating through the current economic crisis with or without International Monetary Fund,” at the 16th edition of the Monthly Stakeholders Engagement and Workers’ appreciation day seminar organised by the Ghana News Agency’s Tema Regional Office, Mr. Thompson said in terms of tax collection, Ghana was one of the lowest in sub-Saharan Africa.
The Dalex Finance Chief Executive said it was not enough to introduce new taxes such as the E-levy while implementation and collection of existing ones were not being effectively done.
He also questioned the rationale behind giving foreign entities huge tax exemptions, revealing that the country lost an estimated GHC5 to GHC10 billion in terms of tax exemptions annually.
On other contributing factors pushing Ghana to seek a bailout from the IMF, he mentioned Foreign Direct Investment (FDI) through buying of the country’s bonds noting that 52 percent of the country’s debt was in the hands of foreigners.
Another factor he said was excessive public debt revealing that over 40 percent of Ghana’s income was used to service loan interest, adding that unwanted public expenditure also put pressure on Ghana’s revenue.
Mr. Thompson noted that due to the economic difficulty Ghana was in, the COVID-19 pandemic, as well as the Russia-Ukraine war, compounded the issue, “Ghana was at the edge of the cleft, COVID-19, and Russia-Ukraine war just gave us a tap and we straight away tumbled into the bottomless economic pit”.
He explained that all the factors put together led to the downgrading of the country’s debt rating, which subsequently pushed investors to take their monies out of the country to other places as they had lost confidence in the economy.
He said it also created FDI flight which facilitated the crash of the cedi saying, “Once your debt is downgraded, and the majority of your debt is being held by foreigners, once it gets to a certain level, they will take their money out.”
Mr. Thompson emphasized that it was a matter of demand and supply, explaining that if people lose confidence in the economy, coupled with the increase in the prices of fuel, the dollars would fly out, and not having enough supply of it, would lead to the crash of the currency.
Mr. Francis Ameyibor, Ghana News Agency Tema Regional Manager explained that the event aimed at providing a platform for both state and non-state organizations to address national issues to enhance development.
He said it also serves as a motivational mechanism to recognize the editorial contribution of GNA reporters toward national development in general, growth, and the promotion of the Tema GNA as the industrial news hub.
Other speakers included: Dr. Amma Benin, Head of Paediatric Department, International Maritime Hospital (IMAH) who spoke on the topic: “Addressing the health needs of children, adolescents, and women, a sure way to build a healthy society” and Dr. Joseph Swanzy, a General Medical Practitioner at IMAH, who spoke on “adolescent health issues and how to address it”.
The rest are Mr. Richard A. Quayson, Deputy Commissioner, Commission on Human Rights and Administrative Justice (CHRAJ) who spoke on the topic: “Public Service Integrity in the fight against corruption”.