A panel consisting of three presenters from the International Monetary Fund (IMF) and two discussants from the University of Ghana converged at the conference facility of the Institute of Statistical, Social and Economic Research, ISSER, University of Ghana on Wednesday May 9, 2018 to discuss the implications for Ghana of the just-released World Economic and Financial Surveys, Regional Economic Outlook.
The report states that Sub-Saharan Africa is set to enjoy modest economic recovery driven by a more supportive external environment. However, public debt and the vulnerabilities of financial systems are rising and medium-term capital growth is expected to plateau at just one percent a year on average. The report addresses the challenges associated with domestic revenue mobilization and private investment as key drivers to turn the situation.
In his opening remarks, Prof. Ebenezer Oduro Owusu, the Vice-Chancellor of the University of Ghana, wondered why economic growth does not translate into people’s pockets. He posed a series of questions from the perspective of the lay person, including: how does economic growth narrow the inequality gap? “What does it mean to the ordinary person when you say the economy is growing? The Vice Chancellor also questioned the focus economists place on macroeconomics to the neglect of microeconomics, concluding with the challenge: ‘Let us see and feel the economy in our pockets and on our tables.’
Prof. Felix Asante, Director of ISSER, moderated the discussions. In contributing to the debate, he urged the Ghana Revenue Authority (GRA) to find innovative ways of increasing revenue mobilisation. He urged GRA to create the enabling environment for people to pay taxes, and to make effort to understand the informal sector and know how to bring it on board. Prof Asante observed that the Private Public Partnership concept is not working in the agricultural sector since agriculture is not treated as business.
Two items which came up for discussion were Property tax and Tax exemptions. Ms Annalisa Fedelino, IMF Mission Chief in Ghana, disclosed that about GHS5billion property tax could not be collected in Ghana last year while the nation lost an estimated GHS2.27bn through tax exemptions.
Prof. Peter Quartey, a discussant, averred that tax collectors are not motivated to do their work well while tax payers, particularly the middle class, are equally not motivated to pay because they do not see improvements of infrastructure around their environment. He observed that some multinational companies also do not pay taxes because they know how to go round the law.