Empower MMDAs for tax mobilisation

Prof. Felix Ankomah Asare giving his address.

Prof. Felix Ankomah Asare giving his address.

The Institute of Statistical, Social and Economic Research (ISSER) of the University of Ghana is advocating a review of the mandate of the Metropolitan, Municipal and District Assemblies (MMDAs) to include tax mobilisation for the country.

 

Professor Felix Ankomah Asante, Director, ISSER, said the MMDAs were strategically placed to be the main agency for raising revenue for the state as they could easily identify businesses and individuals required to pay taxes in their local communities.

 

Speaking to Ghanaian Times on the sidelines of the Institute’s analysis of the 2019 budget statement and economic policy of government in Accra yesterday, he explained that the current practice where the Ghana Revenue Authority (GRA) was the only agency responsible for raising revenue was ineffective, resulting in a huge number of the citizenry not covered in the tax net.

 

He was responding to concerns about the failure of successive governments to meet revenue projections due to low tax compliance and revenue leakages, resulting in borrowing by government from external sources to fund expenditure.

 

“We must find innovative means to raise more revenue if we expect government to execute all the policies and initiatives in the 2019 budget statement which has the potential to transform the Ghanaian economy and help improve livelihoods. For me, the MMDAs are best placed to be the source of raising revenue for the state. They know the people and businesses in their localities and not the GRA personnel in their offices. If we include the local authorities in the revenue raising process, it will be one innovative approach to increase revenue to the state substantially,” he stated.

 

For this to be successful, Prof. Asante said, the MMDAs must be empowered with the necessary by-laws, operational module and a percentage allocation to spur them on.

 

In order to ensure that the re-payment of loans facility do not disrupt economic progress and fiscal discipline, he further called for the inclusion of a payment mechanism for all loans contracted.

 

In a presentation on the 2019 budget, Professor Peter Quartey, Head of Economics Department, ISSER advocated a change in the funding mechanism of the Free Senior High School (SHS) programme to focus on only tuition fees.

 

He said the current mechanism where government was responsible for tuition fees and cost of boarding school was exerting excessive pressure on the country’s budget.

 

Parents who prefer their wards to go through the boarding school system, he said, should be allowed to pay for the cost with those who cannot afford given scholarship.

 

Prof. Quartey noted that the government could also scale up the means testing approach used under the Livelihood Empowerment Against Poverty (LEAP) programme and target those who cannot afford SHS education.

 

The policy could also be designed to target Grade C and D schools, which have been adequately resourced to be attractive and also offering scholarships to children from poor backgrounds who qualify to enter Grade A and B schools, he added.

 

These alternative implementation strategies, Prof. Quartey said, would free resources for government to fund other equally important policies and initiatives in the health, transportation, Information and Communication Technology (ICT), among other sectors.

 

Despite encouraging trade surpluses in 2017 and 2018 as well as budget surplus for 2019, he called for a continuous promotion of non-traditional exports as well as provision of irrigation infrastructure and increased private sector participation in the Planting for Food and Jobs programme to help in reducing food imports.

By Claude Nyarko Adams

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