The Ghana government collects taxes from only two out of the six million eligible taxpayers, a tax expert, Dr Edward Larbi Siaw has revealed, adding that ï¿½we cannot conï¿½tinue to deal with a population of 25 million and collect taxes from only two million.ï¿½
The need to address this gap in our revenue collection drive has become exï¿½tremely urgent as Ghana can no longer borrow under concessional rates and for long periods, he said, explaining that this is because of Ghanaï¿½s ï¿½present rating as a lower middle income economy, which has also led to a reduction in the availï¿½ability of grants and aid.ï¿½
Dr Larbi Siaw, a Tax Policy Advisor to Ghanaï¿½s Ministry of Finance and Ecoï¿½nomic Planning, said this while deliverï¿½ing a keynote speech at the opening of a five-day International Conference on Fiscal Justice last week.
ï¿½The country cannot continue to inï¿½crease tax rates for those in the tax net and leave out others,ï¿½ he said, adding that national tax policies and revenue performances have direct impact on the overall budget deficit.
Dr Siaw told participants at the conï¿½ference the Ministry of Finance wecomes suggestions, workable strategies and recommendations proposed by the conference to help improve the tax sysï¿½tem in the country.
Earlier, the Deputy Campaign Direcï¿½tor of OXFAM International, Mr Stephen Hale, said while taxation was the most sustainable source of financing development, ï¿½there was still a substanï¿½tial lack of capacity and insight of civil society into the technical-fiscal domain of a countryï¿½s tax system.ï¿½
He said the conference - which was organised by OXFAM Ghana, in collabï¿½oration with the International Tax Comï¿½pact and Tax Justice Network-Africa, all non-governmental organisations - was therefore expected to make recommenï¿½dations on the need to engage developï¿½ing countries and Civil Society Organisations (CSOs) in the effort to reï¿½form international tax systems.
Representatives from international organisations, CSOs and government from about 15 African and Asian counï¿½tries participated in the conference.
Mr Hale maintained that to achieve greater accountability, civil society must be well positioned through avenues such as public forums for discussions to proï¿½mote fair and pro-poor tax systems, reinï¿½force public scrutiny of tax governance, and promote a national dialogue on the desirability of more progressive taxation.
Tax revenues in developing countries fall short of what realistically could be obtained when analysing their actual poï¿½tential and capacity, both in terms of efï¿½ficiency and progressiveness, he said, ï¿½tax policies in developing countries were oriented towards collecting taxes easily, including consumption and wage taxes which impose a higher tax burden on poorer households and formal sector employees.ï¿½
According to Mr Hale, on the averï¿½age, 18% of Gross Domestic Product (GDP) comes from tax revenues in African countries, compared to an averï¿½age of 38% in Western European counï¿½tries.
Although the world had created so much wealth which could resolve eduï¿½cational and health-related issues, such resources were concentrated in the hands of the top 1 % rich people, he said.
ï¿½A recent OXFAM paper has reï¿½vealed that the top 85 people in the world control as much as the earnings of 1.5 billion people,ï¿½ he said.
Mr Hale further explained that OXFAMï¿½s recent research revealed that improving taxation could potentially raise $269 billion annually, which could be sufficient to cover 60% of the financï¿½ing requirements for achieving the Milï¿½lennium Development Goals.
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