Whilst Dr. Amoako-Tuffour considers some tax cuts may be obvious given their burden, he noted in an open letter to the nominated Finance Minister, Ken Ofori-Atta, that “hurried tax cuts and exemptions will do little to boost productivity or spur growth.”

[contextly_sidebar id=”3Q9YJBdj34WEN3E43ue9Ql28ksycla5l”]The NPP indicated that, its management of the economy would see a shift in policy from taxation to production, to relieve the burden on the private sector and boost production.

To realize this shift from taxation to production, the NPP has targeted the removal or slashing of some taxes.

Dr. Amoako-Tuffour in the letter suggested that, the sound management of the economy could be achieved by accelerating economic growth, increasing revenue mobilization and prudent spending.

Acknowledging that the point of increasing revenue mobilization was somewhat at odds with the NPP’s manifesto promise, he instead noted that “policy consistency, sequencing and a fine balance between equity and efficiency matter when it comes to sharing the tax burden to finance public enterprise.”

Improving machinery for tax collection

Dr. Amoako-Tuffour also stressed the need to improve the machinery of tax collections along with the need “to close the revenue escape hatches.”

“Next to customs duties, the management of direct taxes (profit and income taxes) is one of the weakest arms of the domestic tax system and it remains a major source of revenue leaks,” the economist noted.

He lamented the “slow motion” progress in domestic revenue mobilization over the past decade, noting that the focus of collection has not shifted from reforming legislation to implementing laws efficiently.

He also noted that personnel in charge of taxation are partly to blame for the low taxes due corruption.

“Those who must collect the taxes and enforce compliance are not without blame. The corrupt and embezzlers of revenue collected have been winning. Strung out behind them is ineffective accountability and partisan political interventions in the implementation of the tax system,” he said.

“Your commitment to action to tackle institutional habits, leakages and escape hatches offers the best opportunity in the short run to realize more non-inflationary revenues,” Dr. Amoako-Tuffour said to the nominated Finance Minister.

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By: Delali Adogla-Bessa/citifmonline.com/Ghana

The post Hurried tax cuts won’t boost growth, productivity – Amoako-Tuffour appeared first on Citi 97.3 FM - Relevant Radio. Always.

In a scathing assessment of the economy left by former National Democratic Congress (NDC) government, he said Ghana currently lay in conditions ripe for a debt crisis to emerge.

[contextly_sidebar id=”STvSGwh3ZvuyhP2PJkAODANGlQnRQbu7″]Dr. Amoako-Tuffour in a letter penned to the nominated Finance Minister, Ken Ofori-Atta, under the newly elected New Patriotic Party (NPP) government, described the economy left to the new government as “slow moving, indebted and jobless”.

This is despite Mr. Terkper consistently reiterating that, his government left behind a stabilized economy for the current administration.

Ghana’s debt stock lies at GHc 110 billion, as at August 2016, having risen to as high as GHc 112.4 billion under the previous government. The country’s debt to GDP ratio also stands at about 71 percent, according to Mr. Terkper.

About GHc61 billion of the debt comes from external borrowing, whiles GHc49.2 billion is from domestic borrowing.

In defence of the debt accrued by his government, the immediate past Finance Minster has argued that all nations borrow for major capital or infrastructural development, hence the previous government’s focus on “smart-borrowing” to sustain growth and development so as to avoid unduly increasing public debt.

Ability to borrow not good management

Dr. Amoako-Tuffour, however believes this “smart borrowing” may have left the Ghanaian economy on the brink instead of providing the needed stability for the economy.

“I must admit that while Ghana has not yet faced a debt crisis of the likes of the PIGS of recent vintage (Portugal, Italy, Greece and Spain), Ghana has built up all the conditions and vulnerabilities for a crisis to emerge.”

He noted further that, the the remedy for the economy “lies not in high spirits accounting, “smart borrowing” nor in Ponzi games, but in sound management and policy prudence for a higher public purpose. The ability to borrow should never be mistaken as a sign of good management.”

Dr. Amoako-Tuffour thus suggested that, the sound management of the economy could be achieved by accelerating economic growth, increasing revenue mobilization and prudent spending.

He elaborates on these points in the letter which can be viewed here.

Dr. Amoako-Tuffour explained in his letter that, substantial growth in national output “no doubt, will reduce the debt burden and provide additional resources through tax revenues; better if that growth creates jobs.”

He also noted that, the predicted economic growth for Ghana would likely not exceed 5-7 percent, thus attention must be paid to prudent spending and revenue management.

“The bulk of the needed adjustments rests on revenue and spending management; not just for the sake of better public sector management, but to provide the enabling environment for private enterprise growth,” the economist stated.

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By: Delali Adogla-Bessa/citifmonline.com/Ghana

The post Amoako-Tuffour slams Terkper’s ‘smart borrowing’ approach appeared first on Citi 97.3 FM - Relevant Radio. Always.