Godfred Bokpin, an economist and Professor of Finance at the University of Ghana Business School, has once again urged the government to fulfill its promise of removing nuisance taxes, irrespective of support from USAID.
Professor Bokpin emphasized that eliminating these taxes should be seen as an incentive for businesses and individuals, rather than a revenue law, in order to promote fiscal sustainability.
He recommended the creation of a government task force tasked with identifying inefficiencies in public spending across various agencies.
In his view, optimizing government spending is a more effective approach to economic stability than relying on heavy taxes.
“Those taxes must go, consistent with the promises that the president made to the people of Ghana, and it will not systematically undermine our development outcome. Let’s not position this stack up as losses. Let’s position this stack up as incentives being written by the government to businesses, to households, to promote consumption, to promote businesses. If you look at it from that perspective, you will see this stock up as an investment that will generate a multiplier effect that will benefit the economy overall. If you are looking at growing the digital economy and you eliminate the e-levy and the momo uptake pickup and the momo operators make more profit, you’ll pay more taxes, generating employment.
“In this country, we have been granting incentives annually through tax exemption to selected businesses and companies to the tune of between 3 to 5% of our GDP annually in the past 25 years. These are tax expenditures. But because it is not benefiting the general public, we are majoring on the minor by talking about this tax cut as though these are losses.”
Our current president, during the campaign, told us that cabinet receipts was costing this nation 5,000,000 Ghana cedis. That is more than the aid the US is withholding from the health and the others. Far more than that, do you know the budgetary allocation to the office of president in 2024? It was almost how much e-levy would bring. What is the level of efficiency in that? If you look at the US, they’ve set up a whole department for government efficiency.
I think the president should set up a small task force tasked with looking at expenditure, efficiency sources, where that can come from across central government and state-owned enterprises, and let’s call that”
Professor Bokpin stated that Ghana should have taken a more proactive approach, although the withdrawal is not unprecedented. He also encouraged the government to consider other alternatives.
“Trump is making this state cut a headline something that almost all our development partners have been doing. We’ve been scaling down significantly even though Ghana is a donor darling country, check the statistics and all of that we should have seen this long ago.”
“You go back to the Ghana Beyond Aid document, and you see the thinking of the country with respect to aid and all of that, so aid is not going to be there, and even across our traditional partners, of course, remember that when we talk about aid, it’s not only coming from the US, we also have aid, that comes also in the form of concessionary funding, those loans price significantly below market, so from the IMF, the World Bank, and the others, so we should look at other alternatives.”
