In a bold call for economic reform, renowned economist and Director of the Institute of Statistical Social and Economic Research (ISSER), Professor Peter Quartey, has urged the Ghanaian government to reconsider its tax policies in the upcoming mid-year budget review.
According to Prof. Quartey argues that reducing certain taxes will foster growth in the private sector, which the country’s challenging economic conditions have significantly hampered.
“Ghana is currently grappling with the stringent economic policies implemented under the International Monetary Fund (IMF) programme.”
Professor Peter Quartey, Director of the Institute of Statistical Social and Economic Research (ISSER)
This programme, designed to stabilize the nation’s economy, has led to severe measures including debt restructuring, which has further strained the private sector. The professor warned that introducing new taxes at this juncture would be detrimental.
“We do not want to see new taxes. It is certainly going to kill the private sector,” Prof. Quartey cautioned. He emphasized that the existing tax burden is already overwhelming for many businesses, and additional levies could stifle any potential recovery or growth.
Prof. Quartey noted that the government should focus on optimizing the collection and implementation of existing taxes rather than introducing new ones.
“There are already enough taxes that could be effectively coordinated and implemented to generate the necessary revenue.”
Professor Peter Quartey, Director of the Institute of Statistical Social and Economic Research (ISSER)
By improving the efficiency of current tax systems, the government can achieve its revenue goals without placing additional strain on the private sector.
Recommendations for Policy Implementation
In addition to his call for tax reductions, Prof. Quartey recommended incorporating some of the innovative ideas proposed by Vice President Dr. Mahamudu Bawumia into the mid-year budget review. He stressed that these policies should be implemented promptly and not reserved solely for campaign rhetoric ahead of the 2024 elections.
“We have seen some statements from the Vice President and the flagbearer of the New Patriotic Party (NPP). I believe they can work in the budget,” Prof. Quartey noted. He highlighted the importance of adopting these ideas to provide immediate relief to businesses and stimulate economic growth.
All eyes are now on Finance Minister Dr. Mohammed Amin-Adam, who is expected to present the mid-year budget later this month. The business community and economic analysts alike are keenly anticipating whether the government will heed Prof. Quartey’s advice and prioritize policies that support the private sector.
Ghana’s economy has been under significant pressure, dealing with both domestic challenges and global economic disruptions.
The IMF programme, while essential for economic stabilization, has required tough measures that have affected many sectors, particularly the private sector. Debt restructuring and other fiscal adjustments have created an environment where businesses struggle to thrive.
The call from Prof. Quartey underscores a critical debate in economic policy: balancing fiscal responsibility with the need to foster a conducive environment for private sector growth. As businesses face increased operational costs and reduced consumer spending power, the need for supportive government policies becomes more urgent.
Reduced tax burdens would allow businesses to invest more in growth and innovation, potentially leading to job creation and improved economic performance overall. Conversely, the introduction of new taxes could lead to business closures, job losses, and a further slowdown in economic activity.
Prof. Peter Quartey’s call for a reduction in taxes and the efficient implementation of existing levies offers a pragmatic approach to stimulating private sector growth. The upcoming mid-year budget review presents an opportunity for the government to adopt these strategies and support the nation’s economic recovery.
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