Yofi Grant
THE GHANA Investments Promotion Centre (GIPC) has engaged stakeholders in the private sector on ways to better mobilise revenue to finance the rising expenditure of the country.
The centre, at its Second Quarter CEO’s Breakfast Meeting, held in Accra yesterday, reiterated the essence of identifying barriers to tax collection and streamlining processes so as to enhance operations and reinvestment opportunities for all investors in the country.
Chief Executive of GIPC, Yofi Grant, in his opening remarks stressed the need for conversations that improve the current tax system which is the major source of government revenue for development.
He said, currently, Ghana’s tax to Gross Domestic Product (GDP) is hovering around 12.6 per cent, as compared to the regional average of 25 per cent.
“So, obviously, we are not collecting enough taxes and because we are not collecting enough, the government is faced with very difficult options of raising finance to meet its obligation,” he said.
He said the country’s tax system was faced with a lot of hurdles like other developing societies, adding that it was important to engage stakeholders on how to optimally improve the tax regime of the country.
Mr. Grant however said that the needed environment for growth and re-investment was needed, hence the establishment of the GIPC aftercare division to get feedback and engage with investors in Ghana.
“Investment is not an activity but a relationship which needs to be maintained,” he added.
The event was themed, “Understanding Ghana’s Tax and Exemptions Regime towards Increasing Confidence in the Business Environment.”
Head of the Tax Policy Unit of the Ministry of Finance, Daniel Nuer, discussed the perceptive of the country’s tax system in order to aid investors in decision making.
He said stakeholders need to change the narrative from tax exemption to tax expenditure, adding that tax expenditure was by statutory legislations and it included income tax exemption, tax holidays, import exemptions, VAT reliefs and excise tax exemptions.
He said the rationale for the tax expenditure was to attract foreign direct investment, alleviate the tax burden on the vulnerable in society and encourage business start-ups.
Mr. Nuer therefore noted that a review and an update of the revenue legislation would improve customs operations and collections and help the country to harness its untapped revenue resources and minimise revenue leakages.
By Jamila Akweley Okertchiri