President Nana Addo Dankwa Akufo-Addo has said there is an urgent need to enhance Ghana’s capacity to mobilise revenue domestically to realise the country’s development potential and create jobs for the youth.
President Akufo-Addo said an economy in which a small proportion of the population bears the brunt of direct taxation was unlikely to witness any rapid transformation.
He said, “We cannot continue to allow less than 10 per cent, specifically 7.8 per cent or 2.4 million people of the population, carry the direct tax burden of 30.8million people,” as the transformation of the economy would require the active involvement and participation of all, including the large informal economy.
The President said a provision needed to be made for every Ghanaian to contribute towards nation-building—“The proposed e-levy is one such innovative fiscal measure which will help improve our tax to GDP ratio on an equitable basis.”
Speaking at the National Labour Conference in Kwahu Nkwatia in the Eastern Region on Monday, President Akufo-Addo said Ghana’s tax to GDP ratio of 12.2 per cent compared unfavourably with its peers the world over.
The average tax to GDP Ratio in West Africa stood at 18 per cent and the recommended ratio for ECOWAS member states is a minimum of 20 per cent.
The average for OECD countries stood at 34 per cent. That, according to President Akufo-Addo, was the reason why the Americans, Germans, French, Japanese and British people, amongst others, could readily fund their development projects whereas “we are constantly struggling to do the same.”
That, President Akufo-Addo said was strongly the basis and in the public interest that the e-levy bill was passed into law as the country could not continue to leave forever on foreign savings.
He said those who were concerned about the country’s debt burden had the right to focus on it as a major pre-occupation.
However, it was time Ghanaians accepted the full implications of the goal of the ‘Ghana Beyond Aid’ agenda, and design the country’s fiscal profile accordingly.
President Akufo-Addo indicated that the government alone could not do it and would never be successful without the combined and collective efforts of its social partners, hence the importance of tripartism and social dialogue.
He said effective social dialogue helped shape policies and programmes for socioeconomic development, adding that the social cohesion that exited among stakeholders, and the democratic path Ghana had chosen “are the envy of many on the continent.”
Such cohesion, he said, could not be taken for granted given the turbulence in other parts of the ECOWAS community.
President Akufo-Addo said concerted efforts needed to be made as partners, to hasten the country’s recovery from Covid-19, by finding intelligent ways of getting everyone to contribute their quota no matter how small.
He said studies had shown that Covid-19 have had devastating effects on all sections of the country’s population, but was encouraged that Ghana, with all her resources—human and natural—would lead the way to inspire other African nations.
“Strengthening tripartism or building peaceful labour relations and a resilient economy” the theme for the conference, according to the President, was “exceptionally apt in view of the times the country finds itself.”
“Building peaceful labour relations and a resilient economy are collective responsibilities “we cannot shy away from if we are to realise this vision,” he stated.
A stable labour front, President Akufo-Addo indicated, created conducive conditions for governments to implement their policies and programmes.
It also provided the avenue for securing a good business climate which increased investment, domestic and foreign, into the country thereby creating jobs and improving the standard of living.
Despite different opinions during negotiations, the President said the government and organised labour had always resorted to laid down processes to express their displeasures and grievances with minimum disruptions to the working environment and industrial peace.
President Akufo-Addo said he had always preferred a participatory approach to build consensus on national issues, and assured that the government would not abandon the tripartite engagement and dialogue in the implementation of policies and programs.
Rex mainoo Yeboah, ISD