According to the Authority’s Board Chair, Dr. Anthony Oteng Gyasi, the Ghana Collection Authority (GRA) plans to increase its annual tax revenue targets in the future years to lower the tax to Gross Domestic Product (GDP) ratio of the nation.
While the GRA has reached its income projections over the previous few years, according to Dr. Gyasi, the Authority has one of the lowest tax to GDP ratios in the sub-region. He was speaking to the B&FT at the Accra launch of the GRA’s Service Charter.
“We are therefore looking at different types of target, which will involve raising how much we are collecting. This will not create a burden on taxpayers, as it will take the country to the level of peers in the sub-region,” he added.
This year, the Authority seeks to collect GH¢80.3billion in tax revenue from the GH¢57.32billion it realised in 2021. With its quest to set higher targets, the 2023 tax target is likely to increase astronomically.
Ghana’s tax-to-GDP ratio of less than 14 percent is significantly lower than the average for 30 African countries (which is 16.5 percent), and much lower than some comparable lower middle-income countries (according to the OECD, 2021).
Equally, the last World Bank Tax Gap Analysis Report indicated that the country’s tax gap is also worrying, as the total corporate tax gap is about 85.6 percent, import tax gap around 32.5 percent and the VAT compliance gap is pegged at 39.3 percent.
The finance ministry is therefore backing the GRA to, as a matter of urgency, put in place measures that increase revenue in order to better the country’s tax to GDP ratio.
Finance Minister Ken Ofori-Atta said there is an instituted plan under the Public Financial Management Strategy (2022-2026) to increase the nation’s tax-to-GDP ratio to about 23 percent.
“This is the way to go if we are to reduce the current high debt burden and significantly improve service delivery for Ghanaians in general,” he said.
Mr. Ofori-Atta explained that a major source of revenue underperformance arises from low tax compliance in the country.
According to him, non-compliance and tax evasion are closely linked with perceptions of poor tax administration and a less than satisfactory customer experience.
“It is in this context that we are delighted with the emphasis GRA is placing on Customer Service, by celebrating the persons who provide service while appreciating the ones who receive it,” he added.
Commissioner General of the GRA, Dr. Ammishadai Owusu-Amoah, indicated that this year’s Customer Service Week – themed ‘Celebrate Service’ – is appropriate and will challenge the Authority to do more in the area of service to customers.
He said the electronic tax clearance certificate, electronic invoicing, and an upcoming electronic auction system are some of the recent initiatives being devised to boost tax revenue mobilisation to meet this year’s target.
The revised launch of the Authority’s customer service charter is expected to place the customer first, with a deepened understanding between the organisation and collaboration between the GRA and taxpayers.