Mid-year budget review: – Government urged to focus on tax revenue

Government must focus on non-tax revenue in the mid-year budget review to shore up her revenue, an Economist, Dr Frank Agyire-Tettey has suggested.

He explained that fines and penalties were avenues government could raise additional funds to meet her revenue target.

Government is reported to be seeking to raise additional GHȻ2.9 billion through the introduction of new taxes in the mid-year budget yet to be presented to Parliament, to meet her expenditure and statutory financial obligations for the 2018 fiscal year.

Speaking in an interview with the Times Business in Accra yesterday on the mid-year budget on the sidelines of the signing of a partnership agreement between Lynch Capital and Corlido Group, Dr Agyire-Tettey, who is a lecturer at the Department of Economics, School of Social Sciences of the University of Ghana, opined that government had often focused on tax to improve her revenue and not paid attention to the non-tax sector.

Under the partnership agreement under the theme, ‘Global readiness in business innovation and strategic financing’, the two companies would offer invoice factoring and receivable financing services in which they would provide financial and supply chain, logistics and procurement support for local companies which want to execute their infrastructural projects.

He said the fines and fees sector presented a huge opportunity for government to raise more financial resources to meet her revenue targets, instead of introducing new taxes to burden tax payers and the private sector.

“There is huge potential in the non-tax sector.  We should not only just look tax revenue but also focus on non-tax revenue such as fines and fees. If we are able to do that we can make a lot from the sector,” the lecturer said.

Dr Agyire-Tettey cited the United Kingdom where the government was making a lot of revenue through spot fines for traffic offences.

Against this backdrop, the Economist stressed the need for government to digitise the economy and introduce electronic means of collecting fines.

Introducing electronic system for the collection of fines and fees, Dr Agyire-Tettey noted it would address human intervention and leakages associated with the collection of fines and fees.

The lecturer entreated the government to control her expenditure and be fiscally disciplined so as to meet her fiscal target.

Touching on the invoice factoring and receivable financing, Dr Agyire-Tettey is aimed at providing financial support to firms, in which Lynch Capital, a local finance company and Corlido Group, a global supply chain, logistics and procurement service provider, would pay for the invoices of companies to give some financial respite so that they can use their working capital for other commitments.

Mr Frederick Dodoo said the invoice factoring and receivable financing was to help companies move from the traditional age long method of bank loans and invoice discounting in executing their projects.

He said the product would help companies to focus on their core services, while Lynch Capital and Corlido Group focused on financing and providing logistical and procurement needs for their infrastructural projects.

Mr Dodoo said the partnership between Lynch Capital and Corlido Group was to address the working capital deficiency concerns of local companies.

He entreated local companies to use the invoice factoring and receivable financing option to finance their projects and free up their working capital for other important commitments.

By Kingsley Asare

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