Tax Policy Advisor of the Ministry of Finance and Economic Planning (MoFEP), Dr. Larbi Siaw, has said that the government will work assiduously to broaden the tax base in order to ensure that existing tax rates are increased only when “warranted”.
“Ghanaians are not ready for increases in tax rates. If we broaden the base and maintain the rates, we shall only increase tax rates when they are warranted. The world is now a global village and we are cooperating on all levels,” Dr. Larbi said.
He was speaking at a sensitisation programme on Foreign Account Tax Compliance Act (FATCA) organised by Ernst and Young (EY) in Accra.
Dr. Siaw indicated that government will seek a reciprocal arrangement that enables it to broaden its tax base as local banks comply with FATCA rules in July 2014.
“The MoFEP and GRA will benefit greatly. If we get our financial regulations right, in addition to our foreign obligations I believe we will benefit greatly. If we get our financial regulations right, in addition to our foreign obligations I believe we will continue on the path we have chosen to broaden the tax base", he said.
The government's budget deficit rose by almost three-fold in 2012 to 11.8% of GDP, fuelled by excessive spending on public wages and energy subsidies.
Earlier this month, Parliament passed a fiscal stabilisation levy and additional import levies to plug the deficit, which is forecast to narrow to 9% of GDP in 2013.
This year the GRA has been tasked to collect GHC 15.6 billion for the state, with GHC 7.4 billion expected from domestic direct tax, GHC 2.2 billion from domestic indirect tax, and almost GHC 6 billion from customs.
Source: B&FT
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