Exploring Revenue Generation Alternatives For Ghana: Beyond Betting Tax And E-Levy

The debate over revenue generation in Ghana has intensified with the proposal to remove the betting tax and the Electronic Transactions Levy (E-Levy). Joe Jackson's question to President-elect John Dramani Mahama highlights a critical issue: if these taxes are removed, where will the revenue come from? This article explores viable alternatives for revenue generation, including government expenditure cuts and other innovative strategies.

CURRENT REVENUE LANDSCAPE
As of 2023, the E-Levy, introduced in 2022, was projected to generate approximately GHC 6.9 billion annually. The betting tax, though less significant, also contributes to the national revenue. Removing these taxes necessitates finding alternative sources to fill the gap.

GOVERNMENT EXPENDITURE CUTS
One of the most immediate ways to address the revenue shortfall is through expenditure cuts. Here are some key areas where cuts can be made:

1. Reducing Overstaffing at the Seat of Government: The Office of the President has been criticized for its bloated staff. Streamlining the workforce can lead to significant savings. For instance, reducing the number of presidential staffers from 1,000 to 500 could save approximately GHC 50 million annually.

2. Rationalizing Public Sector Employment: A comprehensive audit of public sector employment can identify redundant positions. By optimizing the workforce, the government can reduce the wage bill, which currently stands at about 50% of total government expenditure.

3. Cutting Non-Essential Expenditures: Reviewing and cutting non-essential government expenditures, such as travel allowances, luxury vehicle purchases, and other perks, can save substantial amounts. For example, reducing travel allowances by 30% could save GHC 200 million annually.

ENHANCING REVENUE COLLECTION
Improving the efficiency of existing revenue collection mechanisms can also boost government revenue:

1. Strengthening Tax Compliance: Enhancing the capacity of the Ghana Revenue Authority (GRA) to enforce tax compliance can increase revenue. It is estimated that improving tax compliance could raise an additional GHC 5 billion annually.

2. Expanding the Tax Base: Bringing more informal sector businesses into the tax net can significantly increase revenue. The informal sector, which constitutes about 70% of the economy, remains largely untaxed. Formalizing even a fraction of this sector could generate substantial revenue.

INTRODUCING NEW REVENUE STREAMS
Exploring new revenue streams can provide sustainable alternatives to the E-Levy and betting tax:

1. Property Tax Reform: Implementing a more efficient property tax system can generate significant revenue. Currently, property tax collection is inefficient, contributing less than 0.5% of GDP. Reforming this system could increase revenue to 2% of GDP, adding approximately GHC 4 billion annually.

2. Natural Resource Management: Enhancing the management and taxation of natural resources, such as gold and oil, can boost revenue. Implementing stricter regulations and closing loopholes in the mining sector could increase revenue by GHC 2 billion annually.

3. Public-Private Partnerships (PPPs): Encouraging PPPs for infrastructure projects can reduce the financial burden on the government while ensuring development. This approach can attract private investment and generate revenue through tolls and service fees.

CONCLUSION
While the removal of the betting tax and E-Levy poses a challenge, there are viable alternatives for revenue generation. By cutting government expenditure, enhancing revenue collection, and exploring new revenue streams, Ghana can achieve fiscal stability and sustainable development. The incoming government must prioritize these strategies to ensure a balanced budget and continued economic growth.

#Retired Senior Citizen
Teshie-Nungua