IMF $3 billion bailout: Businesses should expect an increase in taxes – Prof Bokpin

Professor Godfred Bokpin, an Economist with the University of Ghana has called on the general public to be on the lookout for a surge in taxes and the introduction of new ones following the International Monetary Fund’s (IMF) approval of a $3 billion loan bailout for Ghana.

On Wednesday, May 17, 2023, the Executive Board of the IMF approved a $3bn loan bailout for Ghana. The bailout is to assist the country restore macroeconomic stability among others.

Reacting to the approval in an exclusive interview with Accra-based JoyNews’, the Economist professor explained that, it is likely there is going to be a sharp increment in taxes because government will have to meet a tax-to-GDP ratio during the review of the programme.

“There are targets that we have to meet every six months of the program review. Part of the target may include increasing our tax-to-GDP ratio to let’s say 18%. The strategy in increasing the tax revenue could negatively impact businesses if we don’t adopt optimal tax handles,” Prof Bokpin said.

To maximize gains and ensure quicker recovery of Ghana’s struggling economy, Professor Bokpin believes that, the country needs strict governance and productivity-enhancing reforms to complement gains from the International Monetary Fund.

He emphasized that the government is key in facilitating robust macroeconomic stability in the short to medium term as the country awaits the first tranche of the $3 billion facility from the Fund.

He explained that “What then is important is how do we complement gains from the IMF, the short term usually, by the necessary governance productivity and enhancing reforms that Ghana needs to do?”

EAN/MA