Bokpin attributes Ghana’s underdevelopment to inefficient utilisation of taxes
A Professor of Economics and Finance at the University of Ghana Business School (UGBS), Godfred Bokpin, has attributed Ghana’s underdevelopment to inefficient utilisation of the taxes that are collected.
His assertion is that although Ghanaians are overburdened with higher levies, the efficiency of the expenditure that the taxes are used for is not in Ghana’s interest, stifling growth in the process.
The finance expert says available data shows that Ghana’s tax to Gross Domestic Product (GDP) has no much difference when compared to other developed nations. However, because the taxes are not put to proper use, they don’t impact the nation in any way.
The Professor was speaking on Ghana’s ailing economy and its depreciated cedi on the KeyPoints on TV3 on Saturday, June 22, 2024, when he made the comments, bemoaning the higher taxes the government has placed on individuals and businesses, in an attempt to solve the economic quagmire the nation finds itself in.
“The country’s strategy in coming out of this is to burden households and private sector with higher taxes. Meanwhile, when you do the analysis, you realise that the biggest problem is the expenditure inefficiency. If you look at the data, you will come to the conclusion that the reason Ghana hasn’t developed is not because we have not taxed our people enough.
“If you look at tax to GDP ratio and you compare that to other countries that have developed and made progress, even compare that to Malaysia, Singapore, South Korea, and the rest of them, you will see that the difference is not that wide. At some point, Ghana’s tax to GDP ratio was higher than Malaysia and Singapore,” he explained.
Economists and financial experts have warned that the cedi will be depreciating further and may likely hit the GHC20 mark by December considering the depreciation trajectory.
The Minority in Parliament has equally raised concerns expressing similar sentiments to those shared by the experts and analysts.
The cedi now trades at over a GHC15 to the dollar, with businessmen channeling the added costs onto consumers, leading to high cost of living.
Business owners have complained over how the cedi is affecting their merchandise, leaving many of them distressed.
The debts owed by some of these businesses have ballooned over the period, whilst some have been forced to shut down.
The Food and Beverages Association of Ghana (FBAG), has, for instance, highlighted that the prevalent business model of selling on credit has exacerbated the problem, as importers struggle to repay their debts
