Seth Terkper urges Government to focus on core revenue streams

Mr. Seth Terkper, a former Finance Minister, has advised the government to prioritize the effectiveness of the country's four major revenue streams to generate the necessary income for economic development and sustainability. These revenue streams include income tax (personal and corporate), Value Added Tax (VAT), petroleum tax, and import duty.

In an interview with the Ghana News Agency, Mr Terkper emphasized the significance of these core taxes as pillars of the country's revenue regime. He stressed that making them work efficiently would prevent the need for frequent reliance on external support and contribute to economic stability.

Mr. Terkper expressed concern about the multitude of levies, noting that despite their proliferation, they contribute minimally to Gross Domestic Product (GDP) and often distort primary tax structures, negatively impacting businesses.

Specifically, he advocated for the elimination of the Electronic Transactions Levy (E-levy) and cautioned against introducing additional taxes such as the proposed 15 per cent VAT on electricity and emission tax. He believed that removing these distortive levies would foster compliance with existing tax structures.

Furthermore, Mr. Terkper highlighted the importance of implementing digitization measures like the Integrated Tax Administration System (ITAS) to expand the tax base. He lamented the delay in introducing a domestic IT system for the Ghana Revenue Authority despite available funding and plans.

Regarding debt management, Mr. Terkper urged the government to adopt a pragmatic debt management policy to prevent excessive borrowing and ensure timely repayment.

In terms of the ongoing US$3 billion loan-support program with the International Monetary Fund (IMF), Mr. Terkper stressed the importance of steadfast policy and reform implementation. He emphasized the need for measures to increase revenue and reduce expenditure to achieve macroeconomic stability and debt sustainability.

Mr. Terkper's recommendations underscore the importance of strategic fiscal management and revenue generation to enhance Ghana's economic resilience and sustainability.