Misplaced tax exemptions cause of low revenue generation – Expert

A tax expert, Dr. Ibrahim Bedi, has said government’s inability to mobilise enough revenue despite making some tax exemptions to allow businesses grow is due to failure to prioritise the right beneficiary businesses. According to the tax expert, who was speaking on The Key Points programme on TV3 Saturday, government gave these tax exemptions to luxury businesses which do not necessarily generate a lot of income to be pumped into the economy for growth. His comments come on the back of findings from a 2019 Institute of Statistical, Social and Economic Research (ISSER) State of the Ghanaian Economy report, which indicated that although Ghana’s economy has seen some growth, the issue of revenue mobilisation is still a problem. According to the report, government is unable to generate enough revenue to meet its expenditure needs. Speaking based on findings of the report, Dr. Bedi said it is not entirely true that revenue generation is low, and that it may seem so because government spends beyond what it budgeted for. “I think we are a country where when we do budget, we seem to put the budget aside and bring in expenditure that was not budgeted for. “So then, you have expenditure adding on to your budget so you feel revenue is low, and so, it is a lifestyle that we must change,” Dr. Bedi advised. He said in an attempt to please friends and favour their businesses, government ended up exempting luxury businesses instead of focusing on businesses that will directly generate income for the country. “Why are we here? We are talking about tax exemptions for luxury items…you don’t give tax exemptions for a five-star hotel, it’s luxury, but if it’s tax exemption to give us low cost housing where a teacher in the village to buy it, that is the essence of tax exemption. “Tax exemption for someone to go into mechanized agriculture to engage one million Ghanaians as workers, that’s tax exemption. Tax exemption to ensure that our roads are done…, so you give exemption to that company so the roads are done at a cheaper cost. “That is how we should use tax exemption, but we use tax exemption in Ghana for political friends to bring rice, chicken and things that are not needed in the country, you will lose,” Dr. Bedi explained. Dr. Bedi therefore tasked government to ensure it does its homework well enough to know what to prioritise and also be on the alert to monitor some of the interventions made. This he believes will help measure growth or failure.

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By Irene Amesimeku|3news.com|Ghana]]>