Some economists have backed calls by the International Monetary Fund (IMF) for government to prioritize progressive revenue generation.
According to them this will ensure that the rich in our society are made to pay taxes and levies which are commensurate with the value of their assets as well as their income.
The International Monetary Fund (IMF) Staff Mission to Ghana, in their concluding statement following a visit to the country from April 28 to May 12, 2021, for the 2021 Article IV Discussions, praised government for its effective handling of the COVID-19 pandemic, but added amongst other things that Ghana’s fiscal consolidation efforts needs to rely more on progressive revenue and spending measures, while guaranteeing fiscal support to the most vulnerable and social safety nets.
Speaking to Citi Business News on the remarks of the IMF, Director of the Institute of Statistical, Social and Economic Research (ISSER), Prof. Peter Quartey said taxing things like fuel which affects everyone, thus raising revenue, is not progressive enough. He however maintains that government needs to make only a few adjustments to bring in more progressive revenue.
“Progressive taxation involves taxing the rich more and less of the poor. I really don’t think we need new taxes. If we do what needs to be done when it comes to property taxes we should be fine. There are other forms of revenue that we haven’t really been good at raising such as investing in the needed infrastructure to tax online transactions and the likes. These types of revenue mobilization strategies will lead to the raising of more progressive revenue.”
On his part, economist with Databank Courage Martey urged government to judiciously deploy monies accrued from the newly introduced or revised taxes from the 2021 budget on expenditure that strengthens the social safety net to make up for a lack of progressiveness in our current taxes.
“If you are going to impose taxes that undermines progressiveness then you might as well spend the revenue raised on items that strengthens social safety nets to protect the vulnerable.”
Source:Fiilafmonline/CitiBuss
