Dr. Abdallah Ali-Nakyea calls for an enhancement in revenue generation without tax increase

On the 16th of March 2021, Dr. Ali-Nakyea, Senior lecturer at the School of Law, University of Ghana and Senior Partner of Ali-Nakyea & Associates, Accra, Ghana, presented on the revenue mobilisation measures in the 2021 budget statement to the honourable members of parliament at the post budget workshop held at the Volta Serene Hotel in Ho. Other persons in attendance were committee clerks, research officers and members of the Parliamentary Press Corps, resource persons including experts from civil society organizations and academia. The primary objective of the review was to further enlighten the members of parliament on the budget statement and economic policy in order to better equip them to meaningfully contribute to the debate in parliament. It was also to have a fair understanding of the performance of Metropolitan, Municipal and District Assemblies (MMDA) in the past year and their proposals for the 2021 fiscal year particularly as they relate to the policy statement and Ghana’s Medium Term Development Policy Agenda.

The presentation was centered on the breakdown of the implementation of the 2020 budget relating to revenue mobilisation, assessment of the strengths and the weaknesses of the 2021 proposed budget for revenue mobilization, as well as proposed recommendations for revenue mobilisation within the mandate of parliament. Dr Ali-Nakyea through his analysis revealed that due to COVID-related expenditures, there was a sudden shortfall in government revenues amounting to GH₵13.6 billion as well as an unexpected and unavoidable rise in expenditures of GH₵11.7 billion. He proceeded to elaborate on the overview of the 2020 revenue performance, highlighting critical paragraphs that indicated the unprecedented impact of the COVID-19 pandemic on the 2020 financial year.

Strategically breaking down each paragraph stated by the Honourable Minister, Dr. Ali-Nakyea proposed ideas on how to improve revenue generation. According to paragraph 113 of the budget statement, all the revised revenue targets were exceeded partly because of the effectiveness and efficiency of the Integrated Customs Management System (ICUMS) at the ports. He suggested that revenue generation could be enhanced even without increases in taxes. Also, in response to paragraph 115 which stated that improved compliance activities of the Ghana Revenue Authority during the period led to increased revenue mobilization. Dr. Ali-Nakyea explained that with the needed support, the Ghana Revenue Authority could exceed its targets. He added that the problem with revenue mobilization was not about low tax rates but the improvement in efficiency of revenue collection by the Ghana Revenue Authority. He reiterated that this should be our focus in this Covid era.

A significant revenue measure expatiated on by Dr. Ali Nakyea was the Gaming Policy. Gaming has become a major income earner all across the globe and a significant source of government revenue. The influx of online betting and automation of the formally manual process has changed the character of revenue sources from that industry. He commented that this measure is long overdue and thus a welcome policy which must be rolled out immediately if the nation is to raise more domestic revenue. The nation’s digitalization agenda should meticulously ensure tracking and tracing of online betting, among others. The Ghana Revenue Authority Unit handling the taxing of the digital economy ardently needs to take a hands-on approach in its policy planning, design and implementation. Other areas expatiated on include the Covid-19 Levy, Tax Administrative Measures, Sanitation and Pollution Levy, Energy Sector Recovery Levy, Road Tolls and Tax Rebates.

In his presentation, Dr. Ali-Nakyea stated that the key step in widening our tax net is to revisit and revise the tax exemptions regime as that can open up the tax base and in effect the tax net. He further explained that expenditure rationalisation is necessary considering the challenges of the procurement system. In his opinion, an extension of the waiver of interest as an incentive for early payment of accumulated tax arrears is a most welcome policy that should have been instituted right at the onset of COVID-19. Nevertheless, the Commissioner-General is given the power only to waive penalties and not interests, therefore when penalties are waived, the interests remained to affect taxpayers who were willing to settle their outstanding obligations but unfortunately could not because of the interest component.

He concluded with a number of recommendations which included improving taxpayer education, implementing the Electronic Point of Sale (EPOs) devices, considering granting of tax credits or relief for expenditure, providing the necessary framework for implementation of property taxation amongst others. These steps are necessary to provide the necessary framework for implementation of property taxation, indicating that blocking loopholes in domestic revenue mobilisation such as illicit financial flows in the natural resources sectors should be paramount


MPs at the post-budget workshop held at the Volta Serene Hotel, Ho

(Photo Credit- Graphiconline.com)