In an effort to increase economic growth and restore macroeconomic stability and debt sustainability, the government has launched a strategy to urgently mobilize domestic resources.
On November 24, 2022, Ken Ofori-Atta stated on the floor of the legislature that mobilizing local revenue had become increasingly important, particularly in circumstances where the country’s access to the international capital market was largely restricted.
“Mr. Speaker, following COVID, we realized that we needed to step up our efforts to raise domestic revenue in order to keep up with our peers’ performance and fund our development goal.
We began with the E-Levy last year, but it did not produce the expected results in terms of funding, he said.
He further said government would introduce additional measures aimed at increasing the country’s revenue to GDP from the current 13 percent to 18 percent in 2023.
This, he explained is expected to see the country mobilise an amount of GH¢143,95 billion as revenues in the year under review.
The measures include an increase of the Value Added Tax (VAT) rate by 2.5 percent which is expected to yield GH¢2.7 billion which would be used to augment funding for road infrastructure development.
Mr Ofori-Atta said this would be complemented by a major compliance programme to ensure that the country derives the maximum yields from existing revenue handles.
He said the government also intends to fast-track the implementation of the Unified Property Rate Platform programme in 2023; and also review the E-Levy Act and more specifically, reduce the headline rate from 1.5 percent to one percent (1%) of the transaction value as well as the removal of the daily threshold.
Finance Minister, Ken Ofori Atta however said the goal of government was to significantly enhance revenues, significantly cut down the cost of running government, significantly expand local production, invest more to protect the poor and vulnerable, and continue expanding access to good roads, education and health for every Ghanaian everywhere in Ghana and the diaspora.