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Measures Needed To Tax Digital Economy – Dr. Ali Nakyea Urges GRA

Measures Needed To Tax Digital Economy – Dr. Ali Nakyea Urges GRA
LISTEN JUN 3, 2020

Tax Analyst, Dr. Abdallah Ali Nakyea, has suggested to the Ghana Revenue Authority (GRA), to put in place the necessary measures to tax digital business transactions.

He says this should enable the Authority to increase its revenue sources in order to meet or exceed revenue targets.

The outbreak of the coronavirus pandemic has impacted the government's revenue as economic activities have largely slowed down.

But as businesses resort to digital platforms to continue with the provision of services and sustain their operations, the digital economy has rather seen a pick up during the period.

Speaking at the virtual business forum of the Citi Business Festival on Citi TV, Dr. Ali Nakyea said taxing the digital economy should reduce the burden on the regular businesses whose operations have been adversely impacted by the pandemic.

“COVID-19 has proven that businesses can be done online through digital platforms, but how are we getting a share as a government from all these incomes being generated? So I think it will help the GRA to start profiling taxpayers so we can move from the 80/20 paradox; this is where we have 80% of tax payers contributing only 20% of tax revenue and 20% contributing 80% of tax revenue, and this is the category who appears to be the hardest hit,” he explained.

The Minister of Finance, Ken Ofori-Atta, has already estimated that the shortfall in import duties, petroleum receipts and the Coronavirus Alleviation Programme will cost the Ghanaian economy 9.5 billion cedis.

In addition, Mr. Ofori Atta believes that there will be an ultimate fiscal gap of 11.4 billion cedis.

In an address to MPs in March 2020, the Minister of Finance said that pandemic will also take a toll on Ghana's GDP growth.

Dr. Ali-Nakyea, who also advised businesses on the need to comply with the various tax laws is hopeful that GRA's ability to improve its revenue base should afford the government the opportunity to help other tax compliant businesses that have been adversely affected.

“It calls for us to start looking quickly at how to put in measures to tax the digital economy because things are bad for some sectors, but an opportunity for other sectors. If people are now manufacturing PPE, face masks and all others, they are not going for free, but they are for sale and income is being earned. The question is how do we get the government's share so we can get money as support to others who are not doing well in their industry so they can also bounce back and then the economy grows”.

---citinewsroom

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