Monetise indiscipline in society by increasing fines, penalties and forfeitures – Dr Theo Acheampong

News_365

The outspoken Energy Economist and Political Risk Analyst, Dr Theo Acheampong, has given sagacious advice to the government of Ghana on how to increase its tax-to- Gross Domestic Product (GDP) ratio.

In simple terms, tax-to-GDP ratio can be defined as how a countries domestically mobilise tax revenue relative to the size of the economy. 

Dr Theo Acheampong asserted in his Facebook post that Ghana's tax-to-GDP ratio is quite low as compare to some African countries, Latin America and the Caribbean. 

“In comparison, the average for the 30 African countries was 16.5% in 2018. This was 2.4 percentage points lower than the African average, and also 9 percentage points lower than the Latin America and the Caribbean 23.1%”, he said. 

In addition, Dr Theo Acheampong indicated that non-tax revenue of Ghana is significantly low as compare to other African states. 

However, he proposed that government should focus on improving the non tax revenue and blocking loopholes in the tax system. This will help in creating fiscal space for infrastructural development in the country. 

“We need to aggressively work on increasing non-tax revenues to at least the regional average of 6.5%. For example, a 3.3% of GDP increase in non-tax revenues will amount to $2 billion per annum, enough to build several schools and hospitals. How can this be done? Monetise indiscipline in society by increasing fines, penalties and forfeitures, property taxes, among others”, he said. 

Note that his analysis is based on 2018 Organisation for Economic Co-operation and Development (OECD) data.



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