The Minister of State at the Finance Ministry, Dr. Mohammed Amin Adam, has revealed that results from the pilot phase of the e-VAT are encouraging; and that the Ghana Revenue Authority (GRA) is eager to ride on its success to widen the tax net.
According to him, government is leveraging digitalization – including initiatives such as the e-VAT, e-Levy and Ghana.gov among others – to expand the tax net, eliminate leakages and close the tax gap.
“Results from the e-VAT pilot phase supplemented by physical monitoring by GRA staff are truly revealing. The initial results have emboldened us to expand coverage to other targeted entities,” he told parliament when he appeared before the house to answer questions from members.
Dr. Adam further noted that government is keen on unlocking the full potential of domestic revenue mobilisation for the country.
Bemoaning the country’s tax to GDP ratio, the minister said: “Revenue mobilisation remains a challenge for us. Our tax-to GDP ratio averages 13 percent, which is lower than the average 18 percent for the sub-region.
“Therefore, unlocking the full potential of our domestic revenue mobilisation is at the core of the president’s vision of a Ghana Beyond Aid.”
The minister also expressed appreciation to parliament for approving the 2023 revenue bills. Parliament in March passed the outstanding revenue tax bills tabled before it as part of government’s measures to generate more revenue, which remained crucial to at the time to complete four of five agreed Prior Actions in the International Monetary Fund (IMF) Staff Level Agreement.
These bills include the Income Tax (Amendment) bill, Excise Duty and Excise Tax Stamp (Amendment) bills as well as the Growth and Sustainability Levy bill. These bills, according to government, were necessary for effective budget implementation as well as boosting the state’s efforts at increasing the Tax-to-GDP ratio from less than 13 percent to the sub-Saharan average of 18 percent.
Government expects these tax initiatives to yield revenues of approximately GH¢3.96billion. The Growth and Sustainability Levy is expected to raise approximately GH¢2.216billion in 2023, whereas the Income Tax (Amendment) bill 2022, which amends the Income Tax Act, 2015 (Act 896) is expected to yield revenues of approximately GH¢1.29billion.
The Excise Duty (Amendment) bill, 2022 amends the Excise Duty Act, 2014 (Act 878) and is expected to yield approximately GH¢455million.
Source: thebftonline.com
