Corruption likely to impede revenue collection

As the fight against corruption appears to be more of lip-service than seeing more action from the state to stem this menace within the economy’s various sectors; the General Secretary of the Public Service Workers Union (PSWU), Brother Richard Amparbeng, has warned that if care is not taken revenue collection in the country may likely be resisted in some time to come.

Ghana over the past few months has received ‘negative’ ratings for the prevalence of corruption in the country by some global and domestic anti-corruption organisations. The latest rating, which was by the Local Chapter of Transparency International, Ghana Integrity Initiative, put the country at the seventh position in Africa in its Corruption Perception Index (CPI) for 2015.

The report also captured that Ghana scored 47 out of 100 and also ranked 56th out of 168 countries, which indicated a poor performance by dropping from its previously ranked position.

The General Secretary of PSWU speaking at the maiden delegates’ conference of the Ghana Revenue Authority Division of PSWU of Trade Union Congress-Ghana, in Kumasi -- waded into the recent brouhaha over the newly-introduced ‘but reversed taxes’, and said Ghanaians ought to have been informed prior to its introduction.

He said people need to understand what the taxes are for and how it would benefit the state when paid.

He noted that elsewhere workers are made to pay close to 40 percent in taxes and are not agitated because ‘there is value for money’. However, he said the same cannot be said in the case of Ghana.

It was against this backdrop that he cautioned that if no stringent measures are put in place to eliminate corruption in the system, revenue collectors may find themselves in a difficult position to collect taxes, given the public notion that a few privileged people will make use of the monies.

He also alleged that not long ago the Precious Mineral Commission (PMC) disclosed that over US$2billion worth of gold from Ghana was exported to India, which he said cannot be traced in the Ghana Revenue Authority’s record books.

He therefore appealed to the Ministry of Finance work to closely with the GRA on closing all tax loopholes to avoid losing huge revenues which could have come to the state for development.

The General Secretary of PSWU further advised government to consider widening the tax net to rake in more revenue as against always raising taxes for the few tax payers. He remarked that this amounts to harassment.

Ghana’s tax gap continues to remain relatively high. Some estimates show that out of a potential taxable population of about 6 million people, only about a paltry 2 million -- which is less than 50% -- actually pay their taxes.

Statistics from the ‘Tax Justice’ shows that only 38% of taxable people and entities pay taxes, leaving out 62% not paying taxes.

Deputy Minister of Finance and Economic Planning Mrs. Mona Quartey said: “Average public sector wages per worker have been increasing both in nominal and real terms but labour productivity has not increased in tandem with wage increases”.

She said government spends a significant portion of its revenue on the payment of public sector employees, and quoted figures from 2014 showing that out of the total tax revenue of GHC19.2billion about GHC10.5billion was used for wages and salaries.
She observed among others that the current tax gap situation calls for further strengthening of tax institutions in the country.

“It also accentuates the fiscal pressures on our national budget, more importantly, impede government’s ability to meet the legitimate developmental aspirations of all Ghanaians,” she said.

She also said the vicious cycle of low tax morale and compliance -- which reduces the lifeblood of funding for public services, needs to be broken, and thus called for the support of organised labour to complement policies outlined by government.

She noted that labour unrest in the country not only makes the economy suffer from massive productivity losses, but also potentially undermines peace and stability in the country.

She was however optimistic that organised labour will continue to dialogue with government to settle all labour issues in a mutually beneficial manner.

The Commissioner General of GRA, Mr. George Blankson, took time to highlight various phases of the Authority’s work in mobilising revenue for the country.

He particularly noted that labour’s input in all phases of the Authority is very important despite all the technology available for its operations.
He said the GRA has fared well in its operations over the years, and mentioned a number of areas including capacity building for staff and other operational areas.

The conference was held under the theme ‘Effective Revenue Mobilisation for National development; Role of Labour’. It attracted participants from all ten regions of the country.