Home News Kojo Oppong Nkrumah Backs Ato Forson’s Tax-to-GDP Promise, Calls for No New...

Kojo Oppong Nkrumah Backs Ato Forson’s Tax-to-GDP Promise, Calls for No New Taxes

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Mr Kojo Oppong Nkrumah

Member of Parliament for Ofoasi Ayirebi, Kojo Oppong Nkrumah, has expressed his support for Finance Minister nominee Dr. Cassiel Ato Forson’s ambitious target of increasing Ghana’s tax-to-GDP ratio from 13% to 18%.

This target, if achieved, would represent a significant leap in the country’s revenue generation efforts, but it also comes with the challenge of balancing the removal of existing taxes, such as the E-levy, Covid levy, and betting tax, which collectively account for about GHS 20 billion.

Oppong Nkrumah, in a debate ahead of Dr. Forson’s approval on January 22, 2025, acknowledged that while the pledge to increase the tax-to-GDP ratio by 5 percentage points is bold, it must be executed without introducing new taxes or rebranding existing ones. He pointed out that 1% of GDP is roughly GHS 10 billion, so achieving an increase of 5% would require generating GHS 50 billion in additional revenue, despite removing major tax sources.

“I believe he can do it, and we will support him as long as he fulfills his promise without renaming taxes,” Oppong Nkrumah stated, stressing the importance of keeping the tax system fair and transparent.

During his vetting, Dr. Forson outlined his vision for boosting tax revenue without resorting to tax hikes. His strategy focuses on improving compliance and addressing inefficiencies within the current tax system. He emphasized that the country has substantial untapped potential in its tax base, which can be harnessed through better enforcement rather than new tax burdens. Forson also made it clear that the government aims to raise the tax-to-GDP ratio to between 16% and 18% in the medium term, which aligns with the standards of Ghana’s regional peers.

Dr. Forson also took a stance on eliminating “nuisance taxes,” such as the betting tax, which he argued yields minimal revenue but causes significant public discontent. He suggested that scrapping such taxes would not have a major impact on national revenue while alleviating the dissatisfaction among citizens.

Meanwhile, a study conducted by the Ministry of Finance and TaxDev researchers found that while Ghana’s tax-to-GDP ratio has improved since 2000, it has stagnated in recent years and still lags behind the global average for countries with similar income levels. This situation presents both a challenge and an opportunity for Dr. Forson, who aims to address these issues by collaborating with the Ghana Revenue Authority (GRA) and the Ministry of Finance’s Tax Policy Unit to drive up compliance rates.

As the country awaits Dr. Forson’s confirmation as Finance Minister, the debate continues on how to balance the need for increased tax revenues with the removal of taxes that the public deems burdensome. The new Finance Minister’s success in this area will be crucial in shaping Ghana’s fiscal future.

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