To enhance domestic revenue generation there will be a need to build a credible tax regime through the implementation of digitization, the Director of Research at the Danquah Institute, Dr Frank Bannor has said.
In addition to this, Dr Bannor suggested simplifying the tax handles without necessarily introducing new ones.
“If we are to enhance our tax-to-GDP ratio, we have to build a credible tax regime through the implementation of digitalization…enforce compliance and simplify the tax handles without necessarily introducing new taxes,” the development economist said.
“We at Danqualy Instutue wholly welcome the flat rate tax,” he said at a press conference in Accra on Tuesday, February 13 while reacting to the address delivered by the Vice President Dr Mahadu Bawumia.
Dr Bawumia had stated categorically that he would abolish the tax on electronic financial transactions, e-levy, if elected President of Ghana. The controversial tax was introduced in 2022, and prior to the introduction, Vice President Bawumia had declared his opposition to levies on electronic financial transactions in an interview.
Delivering his first major address to the nation after his election as NPP flagbearer, during which he gave broad policy outlines of a Bawumia Presidency, Dr. Bawumia minced no words in declaring his opposition to taxes on electronic financial transactions, declaring that he would abolish e-levy as President.
Dr Bawumia added that his bid for a Digital and Cashless Ghana would be significantly boosted if e-levy is abolished.
“To move towards a cashless economy, however, we have to encourage the population to use electronic channels payment. To accomplish this, there will be no taxes on digital payments under my administration. The e-levy will therefore, be abolished,” he declared at the UPSA auditorium on February 7.
Dr. Bawumia also announced that as part of a new tax regime by his government, he will also abolish the emission tax, tax on betting as well as the proposed 15% VAT on electricity tariffs, if it is in existence by January 2025.
He also announced that his government would introduce what he described as a friendly, flat tax regime for Ghana, which will boost individuals and businesses, particularly small and medium-scale enterprises (SMEs).
“My administration will introduce a very simple, citizen and business-friendly flat tax regime. A flat tax of a percentage of income for individuals and SMEs, which constitute 98% of all businesses in Ghana, with appropriate exemption thresholds set to protect the poor,” Dr. Bawumia indicated.