Government To Lose Tax Revenue – GACC Predicts

Report on COVID-19 Fund Government Lose Tax Revenue

The Ghana Anti-Corruption Coalition (GACC) has predicted that the Ghanaian government might suffer a setback in meeting its revenue generation for the year 2021 as a result of the incentives to be given out to donors to the COVID-19 fund.

Government To Lose Tax Revenue

“Despite the numerous benefits, the incentives to donors, come at a cost. First, by making all qualifying donations tax deductible, the government has in effect received future tax revenue now,” the GACC has stated.

In a presentation at a media engagement held at the Coconut Grove Regency Hotel in Accra, the Consultant for the Coalition, Mr John Okyere touching on the topic ‘Cost-Benefit Analysis of The Covid-19 Tax Relief In Ghana’, he catalogued a number of causes that would lower revenue generation for the government.

The COVID-19 crisis has had large impacts on government budgets and generated a fiscal crisis, as well as has forced almost all governments around the world to reduce budgets in some essential services in order to meet the healthcare needs of the population.

With the limited domestic revenue, Ghana like most developing economies have had to rely heavily on external financing courses such as loans from the World Bank and the International Monetary Fund (IMF).

At the peak of the pandemic, the Ghanaian government made a formal appeal to the private sector to support the government’s effort by donating cash and other resources including Personal Protective Equipment (PPE) to help fight the virus.

The donation into the COVID-19 funds have contributed immensely towards the government’s response efforts to the pandemic.

According to the GACC, this implies that in the coming years, the government, in principle, will lose substantial tax revenue.

“Apart from a few individuals who may not want to claim such deductions, the corporate bodies who are for-profit will see this as an excellent opportunity to reduce their tax liabilities.

Furthermore, the incentives, although are good at supporting the government’s revenue needs at this critical time, it provides a strong breeding ground for corruption. Some of the donations are provided in-kind (goods), which are subsequently valued,” the Coalition added.

The GACC stated that it is not clear how the valuations are done and who oversees the determination of the financial equivalent of non-cash donations.

“In the coming years, donors will start making the allowable deductions. The Ghana Revenue Authority (GRA) will be required to allocate resources, both human and material to monitor and ensure that taxpayers do not overstate claims.

And that deduction is in line with existing tax regulation and the provisions in the COVID-19 donation tax incentive provisions,” the Coalition opined.

The Coalition, however, commended the government for establishing the National COVID-19 Trust Fund as well as the move by private individuals to establish the COVID-19 Private Sector Fund.

“Again, the government’s decision to introduce a tax incentive to the donations to ensure tax-deductible and all associated VAT are exempt was and still is a very laudable idea,” GACC disclosed.

The Coalition said the move has encouraged more companies to commit their resources that is both cash and in-kind to support the government’s response.

By: Isaac Dzidzoamenu/capitalnewsonline.com

Send Your Stories For Publication

  • Do you have a story for us or need a promotion/advertisement? Submit them to CapitalNewsOnline via our
  • Email admin@capitalnewsonline.com or
  • WhatsApp  CHAT US NOW 

||Disclaimer: CapitalNewsOnline is not responsible for the reportage, or opinions of contributors published on the website.||About Us||Contact Us ||

 

Leave a Reply

Your email address will not be published. Required fields are marked *