Economist and lecturer at the Wisconsin International University College, Dr. Samuel Worlanyo Mensah has revealed that the decision of the President elect John Dramani Mahama To remove certain taxes he terms as nuisance is a very good move.
The President elect John Dramani Mahama as part of his initiatives pledged to remove some taxes he considers as nuisance.
Speaking to Univers News Dr. Worlanyo Mensah revealed that these nuisance taxes have been hindering the growth of the local economy.
He however encouraged government to be cautious about the timing.
“I believe that the position of the President-elect is laudable, because the issue about the nuisance taxes continues to be anti-productive and it really hinders the growth of the local economy. But in that sense, I believe it’s a very good move for us to scrap the nuisance taxes.
“I also encourage the government to be very cautious about the timing. If we are not careful, the timing will make everything wrong. Because if you look at the government’s expenditure, you realize that the government needs to raise more revenue now to be able to mitigate the expenditure gap.”
“Government’s inability to do that will definitely put much more pressure on the local economy. And that will invariably increase the cost of living, so I encourage government to develop more proactive means of generating revenue domestically, whether directly or indirectly.”
He added that he believes plans of the government to implement certain policies such as the Free Fees For all level 100 Tertiary Students in the period of scrapping the nuisance taxes may not be feasible considering the timing.
“I believe that this will not be possible, this will not be feasible within the 120 days, but it will be possible within a year, because definitely you need to get the economy running, put a lot of structures in place before you can definitely do away with these nuisance taxes, and that may take like a year. And so I believe that this will not reflect in the 2025 annual budget, but rather 2026 annual budget. By that time, the budget for 2026 will be out around October, November, and I believe that that would be a reasonable time for the government to roll out this policy.
“By that time, they have put enough structures in place in terms of revenue generations and in terms of stabilizing the local economy. Without that, I believe they will be putting the economy under intensive care units, and that may be a recipe for disaster.”
Dr. Worlanyo further encouraged the government to develop an internally generated fund for growing the local economy rather than depending on the IMF program advising government to continue the digitalization initiative in order to capture more data for revenue generation.
“What I foresee and what I believe governments will be able to do is to develop an internally generated fund, developing the local economy, rather than depending on the other donor institutions like the IMF and World Bank. And so there is a need for us to develop the local economy vis-à-vis. I believe we can also equally work on the property rates. And that will be the indirect way of generating revenue.
“That calls for digitization. We needs this digitization approach to be fully materialized, because that is what is going to present or produce the data for us to do that.”
“Governments should try as much as possible to ensure that the digitization that the previous government has equally started is given priority attention, because definitely we need data to do this economic and social engineering.”
Story by: Sarah Esinam Atiemo | univers.ug.edu.gh
