President John Dramani Mahama has underscored that his administration was shifting attention to tightening tax administration and boosting compliance instead of rolling out fresh taxes to grow domestic revenue.
Speaking when the Kwahu Business Advocacy Group paid a courtesy call on him at Jubilee House on Wednesday, July 8, the President explained that recent reforms are designed to reduce pressure on taxpayers while making revenue collection more effective.
He noted that government has already scrapped a number of levies that drew public criticism, including the Electronic Transfer Levy and the COVID-19 Health Recovery Levy, and is still working to simplify the tax structure.
“We’ve done away with some of the taxes Ghanaians called nuisance taxes. The COVID levy is out, the E-Levy is out and we are in the process of rationalising the remaining ones. In general, our indirect taxes, specifically VAT, have dropped from 21 per cent to 20 per cent,” he said.
The President emphasised that the focus now was on plugging loopholes and ensuring the existing tax system worked better.
“What we are prioritising is efficiency in tax collection because we are convinced that with better collection, there is no need for new taxes. If we are able to collect more effectively and government’s income rises, we can then start reducing the tax burden on the people,” he stated.
President Mahama added that sustained gains in revenue mobilisation could pave the way for further tax cuts, especially for companies.He indicated that if improvements in collection persist over the next two to three years, government could look at lowering the corporate income tax rate to enable businesses to keep more earnings for growth and investment.
“I believe that within the next two or three years, if our tax collection efficiency keeps improving, there is every justification to reduce corporate income tax further so that business owners can reinvest part of what they pay to government,” he concluded.
