President John Dramani Mahama has indicated that the government is prioritising improved tax collection and compliance rather than introducing new taxes as part of efforts to boost domestic revenue mobilisation.
Speaking during a courtesy call by the Kwahu Business Advocacy Group at the Jubilee House on Wednesday, July 8, President Mahama said recent tax reforms are aimed at easing the burden on citizens while enhancing the efficiency of revenue collection.
According to him, the government has already scrapped several taxes widely criticised by Ghanaians, including the Electronic Transfer Levy (E-Levy) and the COVID-19 Health Recovery Levy, and is continuing efforts to streamline the country’s tax regime.
“We’ve removed some of the taxes that Ghanaians described as nuisance taxes. The COVID levy is gone, the E-Levy is gone, and we’re working to rationalise the other taxes. Overall, the indirect taxes, which are value-added taxes, have come down from 21 percent to 20 percent,” he said.
The President stressed that the government’s current strategy is centred on improving tax administration and plugging leakages within the revenue collection system.
“Now, we’re concentrating on efficiency in collecting the taxes because we believe that if we collect the taxes more efficiently, we don’t need to introduce new taxes.
“What we’re concentrating on is efficiency in collecting the taxes, and I’m sure that if we collect the taxes more efficiently and the government is making more revenue, we can begin to bring down the incidence of tax and the burden on our people,” he stated.
President Mahama further suggested that sustained improvements in revenue mobilisation could create room for future tax reductions, particularly for businesses.
He noted that if tax collection efficiency continues to improve over the next two to three years, the government may consider reducing the corporate income tax rate to allow businesses to retain more capital for expansion and investment.
“I believe that in a few years—if in the next two or three years our efficiency in collecting taxes is improving—there is no reason why we can’t reduce the corporate income tax and bring it lower so that business people can be able to reinvest some of the money that they pay to the government,” he added.
