Taxation And Fiscal Reform In Ghana

To finance basic pro-poor services, the Government of Ghana must mobilize more public revenue. But tax reform has been highly controversial in Ghana. An attempt to introduce VAT in 1995 failed after widespread protests. Although a second attempt to introduce VAT in 1998 succeeded, strong resistance to tax reform remains, and the total tax base remains narrow and over-dependent on petroleum taxes. This paper argues that slow progress in public expenditure reform, in particular in raising spending on basic services, has impeded the public's willingness to pay taxes, since many people see little benefit. This is especially the case in the poorer regions, which in addition have borne the brunt of the rising petroleum tax. The paper concludes that much more attention must be given to the political economy of fiscal policy in Ghana, if lasting improvements to the fiscal system are to be achieved.

Essay from the year 2018 in the subject Economics - Finance, grade: 89, University of Cape Coast, course: Bachelor of commerce in accounting, language: English, abstract: Over the years, Ghana’s budgets have suffered perennial deficits partially on account of low domestic tax revenue mobilisation which statistically hover around 18% of Gross Domestic Product. Whilst this downside has several facets, one of the foremost remedies is protecting the domestic tax base. Widening the domestic tax base of the economy has been a subject matter that has received hefty attention of successive Governments over years in most parts of the world. As a matter of reality, various tax authorities in Ghana have created numerous efforts directed at mobilising as much as possible tax revenue to assist government expenditures on developmental, social, recurring and interventional projects over the years. These efforts of tax mobilisation are dear to governments for the achievements of fiscal consolidation and higher tax revenue to Gross Domestic Product ratio. Ghana Revenue Authority’s efforts are carefully crafted to tackle the informal sector where there are perceived revenue leakages but still struggling as a result of the inadequacies of the current tax structure to efficiently mobilise revenue from certain industries and sectors of the economy. The concept of the informal sector with its tax liability is considered as a social model mainly used for small, medium and micro enterprises that are quite difficult to be captured by the operations of tax authorities. It is evidently a fact therefore that though the government needs to mobilise tax revenue quite on the aggressive side, tax increases have a decline effect on upper-income households’ reported taxable income and indeed more than, decrease moderate-income households’ reported income. This is not because upper-income households choose to work less, but because they take advantage of their greater capacity to shift income from one category to another or one time period to another to reduce their taxes. Consequently, Fieldhouse reiterates that, raising tax rates while broadening the tax base through tax elimination and expenditures in the form of deductions, exclusions, exemptions, and preferential treatment of capital income against labour efforts and improving tax enforcement to minimize this avoidance thus could deter inefficient allocations of capital that are made simply for tax purposes.

The first edition of this book-Taxation in Ghana: A Fiscal Policy Tool for Development- is the product of considerable tax research from 1943 to 2018, spanning a period of 75 years and grounded in knowledge and concepts; as well as, applications through an extended period of tax practice, teaching and learning; combined with international exposure. A lot of insights have been illuminated based on lessons learned and drawn from other countries, including the United States of America to enrich the contents. Against the backdrop of the dynamic nature of taxation and fiscal policy. Most of the existing taxation books in Ghana focused on tax practice. So, the purpose of this book is to bridge the taxation scholarship gap. In addition to traditionally-treated topics in most taxation books in Ghana, the novelty in this book is the inclusion of important topics on tax planning, tax reforms, and tax administration, and many more. As a result, specific recommendations have been proffered for the consideration of policy makers in developing countries. References and Acts of Parliament; supported by appendices have been provided for further studies on the subject. A true story of the first major oil discovery in Ghana by Mr. George Yaw Owusu with M. Rutledge McCall published 2017 in the United States of America: In Pursuit of JUBILEE was used to enrich the discussion on petroleum (Oil and Gas) in Chapter 48 of this textbook. Additionally, Apostle Professor Opoku Onyinah of the Church of Pentecost has been presented for his phenomenal transformational leadership in Africa in Chapter 66. The book has been designed for: (1) Individual study, (2) Group study, (3) Lecture material, (4) Policy Manual, and (5) library or reference.

Issues of taxation and development, which have long been a central concern of the IMF, have attracted wider and renewed interest in the last few years. This paper reflects on three broad lessons of experience: that developing countries differ vastly in tax matters, and in ways that are less than fully understood; that the history of ‘big ideas’ in guiding tax reform for developing countries is decidedly mixed; and that the value of the emphasis often placed in this context on ‘informality’ is decidedly limited. It also asks whether ideas of ‘state building’ emphasized in some of the recent literature are likely to lead to practical advice much different from that commonly offered now.

There is a widespread concern that, in some parts of the world, governments are unable to exercise effective authority. When governments fail, more sinister forces thrive: warlords, arms smugglers, narcotics enterprises, kidnap gangs, terrorist networks, armed militias. Why do governments fail? This book explores an old idea that has returned to prominence: that authority, effectiveness, accountability and responsiveness is closely related to the ways in which governments are financed. It matters that governments tax their citizens rather than live from oil revenues and foreign aid, and it matters how they tax them. Taxation stimulates demands for representation, and an effective revenue authority is the central pillar of state capacity. Using case studies from Africa, Asia, Eastern Europe and Latin America, this book presents and evaluates these arguments, updates theories derived from European history in the light of conditions in contemporary poorer countries, and draws conclusions for policy-makers.