IMF advises Ghana to introduce more taxes

The International Monetary Fund (IMF) has advised the government to reinstate some abolished taxes and expand some existing ones in other to meet its short-term revenue projections.

The IMF advised its latest report on Ghana that, authorities must urgent measures to overcome what the firm termed as the perennial tax shortfalls.

It asked the government to reintroduce the 17.5 percent VAT on financial services.

The firm said: “New taxes that can expand the taxable base include a VAT of 17.5 percent on financial services; a tax increase on communication services from 9 percent to 12 percent; the expansion of the national fiscal stabilization levy on all firms; the minimum chargeable income; and the reintroduction of the high-income tax rate of 35 percent.”

the IMF suggested some measures would have to be taken to ensure Ghana meets its target of raising its raise in tax output to 18% from the current 13% which is below 15% in Sub-Saharan Africa.

The IMF suggested a review of the import duty benchmark as one of the measures.

According to the IMF, the benchmark which was reviewed has not generated the expected increase in imports through trade diversion to Ghana ports.

It added that the short term revenue measures could immediately yield up to 0.8 percent of GDP while the new taxes could yield 0.25 percent of GDP, while compliance could bring around 0.5 percent of GDP.