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Politics of Tuesday, 30 July 2019

Source: abcnewsgh.com

Political parties in Ghana more efficient in opposition than in Government – Prof. Bokpin

A lecturer at the University of Ghana Business School, Prof. Godfred Alufar Bokpin, has said political parties in Ghana are more efficient when in opposition than when they are voted into power, ABC News can report.

On Joynews’ PM Express, closely monitored by ABC News on Monday, the Economist stated that the major problem facing the country is the efficiency of political parties while in opposition as opposed to when they are in power.

According to him, most parties make huge promises but find it difficult to implement same when given the opportunity in Government.

“This has been Ghana’s problem. We are more efficient when we are in opposition, when we are in government, then the reality becomes difficult for us to manage and that is why almost all the political parties when they’re in opposition, you get the best statement, that’s when you get to judge their best intentions but then when they get into government, I don’t know the reason why they are unable to implement with some level of accuracy, the things that they talked about when they were in opposition, this is where we find ourselves”

The Finance Minister, yesterday, presented a mid-year budget review in Parliament where he announced an increase in some taxes such as Communications service tax, fuel and petroleum taxes as well as the withdrawal of the luxury vehicle tax.

Even though these taxes are yet to be fully implemented, ABC News has gathered a number of reactions from the public who appear not too enthused by the decision.

In 2017, the first budget of the Akufo-Addo administration saw the cutting of a number of taxes, the reduction in tariffs, the introduction of many incentives as well as a declaration of some taxes as nuisance.

Fast-track to 2019 and a section of the public are arguing that those measures put in place by the government in 2017 are the same measures which have come round to bite them now.

Expressing his views on the mid-year budget review, Prof. Bokpin stated that the increase in some of the taxes as announced by the Finance Minister could have been avoided had government not chosen a ‘low hanging fruit’ approach in generating revenue.

“I want to believe that government has a point in some of the taxes that they had to do away with, that is also realistic but maybe they could have been a bit careful about it, they were more optimistic…To some extent, it could have been inevitable because as a country, we have failed to look at other ways of generating tax revenue and because of that we tend to use the lazy approach or low hanging fruit because that doesn’t require a lot of effort to enforce compliance so that is what we have been doing and that is why in the time past we’ve had all kinds of taxes like taxes on financial services, airline and all of that so perhaps we could have done better” he told host of the programme.

The Finance lecturer believes that one major challenge the country is battling with is enhancing the domestic revenue envelope which has failed to respond to various tax measures put in place by the government.

He says until practical steps are taken to address this challenge, it will be impossible for the government to achieve its Ghana beyond aid agenda.

“The reality on the ground is that in the last couple of years, the revenue envelop has failed to respond to the various tax measures that have been implemented and that is why we are in this state and one pressing policy challenge facing the country Ghana right now has to do with enhancing the domestic revenue envelop and until government takes practical steps to address that, Ghana beyond aid will be beyond all of us as well, until that is addressed, our public debt will continue to rise because the way we have tried to contain this over the years is to do expenditure cuts, that itself can also be very harmful to economic growth".
"To what extent can you continue to contain the revenue shortfall through expenditure cuts But experience also tells us that in an election year, government can’t cut expenditure to that extent and what that will mean is that the physical deficit is going to widen and then we’re going to spend the next couple of years more or less to correct that, unfortunately, this is where we find ourselves” he added.

Prof. Bokpin opined that the government of the day has failed to do enough in the area of tax exemptions and that, according to him, is one of the major reasons why the country’s revenue areas have remained dwarf.

“Apart from that, you’ll also realise that the growth that we’ve seen in the economy is driven largely by hydrocarbon production, mining, of course, in terms of volume that has also gone up, world price has also favoured us but the non-oil real sector, that employs a lot of people and that is where we could actually generate a lot of tax revenue has not been doing quite well and all of that goes to affect the revenue envelop but you see we have talked about why the revenue envelop has failed to respond to the various tax measures over the years, we’ve talked about exemptions and all of that but it doesn’t seem to me that this government is doing sufficiently well in the area of exemptions, and then other areas but whiles we talk about the fact that our revenue areas remain dwarf” he explained.