A critical voice has emerged advocating for innovative domestic revenue generation strategies in the ongoing dialogue about achieving a ‘Ghana Beyond Aid’. Professor Peter Quartey, the Director of the Institute of Statistical, Social, and Economic Research (ISSER), has stressed the importance of increasing domestic revenue without necessarily imposing higher taxes on the citizens of Ghana.
This perspective aligns with the broader goal of reducing Ghana’s reliance on foreign aid, a sentiment echoed by other thought leaders such as Lord Paul Boateng.
A key strategy highlighted by Prof Quartey is the digitisation of the tax system. By leveraging digital technologies, the Ghana Revenue Authority (GRA) and other institutions can enhance efficiency in revenue collection and minimise the human discretion involved, which often leads to inconsistencies and corruption. While some progress has been made in this area, Prof Quartey argues that these efforts need to be intensified.
“We need to raise more revenue domestically, not by imposing higher taxes but by making the existing tax systems more efficient, and we’ve started that with digitization which GRA and the others are doing and I think we need to deepen that. And we need to remove the human interface. There is so much discretion when it comes to raising revenue in the country.”
Professor Peter Quartey
Another critical aspect of Prof Quartey’s proposal is expanding the tax base to include the informal sector, which constitutes a significant portion of Ghana’s economy. By bringing more economic activities under the tax umbrella, the government can increase revenue without raising tax rates. This inclusive approach ensures that all economic participants contribute fairly to national development.
The call for a shift from foreign aid reliance was strongly advocated by Lord Paul Boateng during his keynote speech at a leadership lecture at the University of Professional Studies, Accra (UPSA). Lord Boateng emphasized that dependence on external aid impedes Ghana’s growth and development. Prof Quartey supports this view, suggesting that enhancing domestic revenue generation is a vital step towards financial independence and sustainable development.
Controlling Government Expenditure
Prof Quartey also points out that for Ghana to achieve financial independence, the government must not only focus on revenue generation but also on reducing its expenditure. He criticized the government’s tendency to increase expenditure significantly even in times of revenue shortfalls. Reviewing the budget statements from 2022 and 2023, he questioned the rationale behind the substantial hikes in expenditure despite evident revenue challenges.
“We also need to look at our expenditure. I don’t think we are getting value for money for the expenditures, especially for the procurement of goods and services. It surprises me that in times of difficulty like this, if you look at the budget statement from 2023, 2022, and even before that we increased expenditure, sometimes, 42%, 30% and you ask yourself, if you are struggling to raise revenue yet your expenditure is still going up, how do you address all the beautiful things you raised in the Ghana Beyond Aid document? We need to go back to the drawing board.”
Professor Peter Quartey
The vision of a ‘Ghana Beyond Aid’ is not merely a slogan but a comprehensive approach to achieving economic independence and sustainable development. By focusing on innovative domestic revenue generation methods such as digitising the tax system and expanding the tax base, and by exercising fiscal prudence in government expenditure, Ghana can significantly reduce its dependency on external aid.
Prof Quartey’s insights provide a clear roadmap: enhance efficiency in tax collection, ensure inclusivity in the tax system, and exercise stringent control over government spending. These steps are crucial for building a robust and self-sufficient economy. As Ghana continues to strive towards this goal, the implementation of these strategies will be essential in transforming the vision of a ‘Ghana Beyond Aid’ into reality.
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