The government of Ghana is being urged to prioritize domestic revenue mobilization (DRM) by targeting high-net-worth individuals and multinational corporations rather than solely relying on easily collectible tax sources.
“Government has always focused on low-hanging fruits, which is regressive,” Executive Director for Green Tax Youth Africa, Nii Addo said.
The organization advocates that focusing on these sectors would significantly increase revenue available to the government, potentially improving public service delivery and national development.
“Resource mobilization is key for development. To develop and minimize borrowing, we need to focus on raising internal funds to sustain our development strategies,” he added.
Green Tax Youth Africa believes that the successful implementation of this strategy requires the government to invest in strengthening revenue collection mechanisms. This includes building the capacity of tax authorities and equipping them with the necessary skills to monitor and collect taxes effectively from high-net-worth individuals and multinational corporations.
Such efforts would help curb the exploitation of tax loopholes and increase compliance.
“When you look at the structure, some companies are not paying their taxes—specifically Corporate Income Tax. They withhold significant amounts of money. We need to seal these loopholes, recoup the lost revenue, and reinvest it into development,” the representative explained.
“Government, in its quest to raise revenue, seems unwilling to make these investments. There is a need for the government to invest in capacity-building to ensure that all those mandated to collect taxes have the necessary tools to clamp down on tax evasion,” Mr. Addo said.
Illicit financial flows (IFFs) present a substantial challenge to global economies. Countries are on course to lose nearly US$5 trillion in tax revenue over the next decade due to multinational corporations and wealthy individuals using tax havens to underpay taxes.
The Tax Justice Network estimates that global tax abuse costs countries approximately $480 billion annually. Of this, $311 billion is lost to cross-border corporate tax avoidance, while $169 billion is lost due to offshore tax evasion by individuals.
Nii Addo, Tax Policy Analyst and Executive Director of Green Tax Youth Africa, emphasizes the urgent need for Ghana to strengthen its legal frameworks and improve governance structures to combat these illicit financial flows.
“We urge the government to look at sealing the loopholes and targeting large institutions, including high-net-worth individuals, to secure its fair share of tax revenue,” Mr. Addo stated.
He also highlighted a troubling trend where some high-net-worth individuals use real estate transactions to launder money. “There is a need for the government to clamp down on these activities. A lot of money is circulating outside the banking system, and the government needs to ensure that these channels are properly regulated. No one should be able to take a sack of money and say they are buying a property,” he stressed.
Mr. Addo shared these insights at a two-day capacity-building workshop for journalists in the Upper East Region on IFFs in Ghana. The event was organized by the Media Foundation for West Africa (MFWA) with funding from Oxfam in Ghana and the Ministry of Foreign Affairs of Denmark.
William Nlanjerboh Jalulah, Programmes Manager at MFWA, explained that the training was crucial for journalists due to the financial and economic impact of IFFs on the world, and more importantly, on developing economies like Ghana.
“As part of the United Nations’ Agenda 2030, all member states are required to address illicit financial flows. As an organization that works with the media, we believe building the capacity of journalists is essential for reporting on these critical issues,” he said.
The Media Foundation for West Africa plans to replicate similar trainings for journalists across the country.
Beyond training journalists, the foundation has initiated a series of forums aimed at drawing national attention to the impact of IFFs. On Tuesday, December 3, 2024, former Auditor-General Daniel Yaw Domelovo spoke at the first forum, which focused on “Curbing Illicit Financial Flows in Ghana.”
Source: A1Radioonline.Com | 101.1MHz | Mark Kwasi Ahumah Smith | Bolgatanga
