Government to expand tax base to improve tax administration efficiency

Mr Seth Tekper

Accra, March 5, GNA - Government's focus on revenue generation in the 2013 fiscal year is to expand the tax base and to improve efficiency of tax administration.

Mr Seth Tekper, Minister of Finance and Economic Planning who announced this on Tuesday, added that the move had become necessary because the country needed to sustain her revenue mobilisation efforts in view of the huge funding requirements needed to close Ghana's infrastructure gap and domestic payment of arrears.

He was presenting the 2013 Budget and Government's Economic Policy on the floor of parliament.

The budget was with the theme: 'Sustaining Confidence in the Future of the Ghanaian Economy'.

Mr Tekper noted that Domestic Tax Effort as measured by the Tax/GDP (non-oil) ratio improved from 15.1 per cent in 2011 to 16.0 per cent in 2012.

He however added that the Tax/GDP ratio including oil (excluding exemptions) increased from 15.4 per cent in 2011 to 16.3 per cent in 2012.

On tax bills, Mr Tekper said the various Commissioners at the Ghana Revenue Authority needed to maintain flexibility in carrying out their function under the overall control of the Commissioner General.

'The Ministry of Finance will assist to smoothen out this reorganization so that the intended synergy in operations will be achieved with positive results' he added.

Mr Tekper called for consolidation and harmonisation of the various tax laws.

He said during the year, the following laws will be tabled before Parliament for consideration.

They included the Revenue Administration Bill; Value Added Tax Bill; Income Tax Bill; Customs Bill; and the Excise Bill.

Mr Tekper said personal income taxation would continue to be used as a measure for equitable distribution of income and also for protecting low income earners.

He said the annual income tax thresholds and brackets were being revised to take cognizance of the current inflation trends in the country, the impact of real increases in GDP on personal incomes, and to compensate for the loss in purchasing power of income earners.

Below were Mr Tekper's proposals:
Table 31: Tax Bands                   Income Band (GH¢)                   Rate(%)

First                                          1,584                                        Free

Next                                         792                                           5

Next                                         1,104                                        10

Next                                         28,200                                       17.5

Exceeding                                  31,680                                       25

GNA