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Weak revenue mobilisation still a major problem for gov’t - IFS

Ahead of the mid-year budget review, which is to be heralded on July 29, this year at Parliament House by the Minister of Finance, Mr. Ken Ofori-Atta, to mark the government’s progress and shortfalls within the 2019 fiscal year, the Institute for Fiscal Studies (IFS) has predicted a major challenge hindering the implementation government’s initiatives.

The IFS has predicted that the country suffers a setback as a result of weak revenue mobilisation being executed by government agencies nationwide for close to a decade now.

According to them, the government had refused to adjust many of the user fees and levies charged by public agencies for services they render to the state, and that has resulted in the depressed state of the real value of fiscal receipts since the 2017/2018 financial year.

Citing an example of the fees charged at the various passport offices nationwide, the researcher was emphatic that the fees taken had not seen any appreciable rise from 2011 till date; the fees charged for acquiring a passport and its renewal remains the same, as well as many other services rendered nationwide within the various government ministries and agencies.

Though the Akufo-Addo-led administration has seen to an improvement in the service rendered in many government sectors, and the IFS sees the need for it to also uplift the amount charged for these areas, which if well-visited could be a major component of revenue mobilisation for the government.

The IFS iterated that in doing so, the government could rake some more money to continue a lot of its numerous flagship projects and bring the economy back on track.

Mr. Leslie Mensah, a Research Fellow at the IFS, made this known yesterday at a press briefing in Accra.

He also looked back from 2017/2018 fiscal year and lamented that the tax cuts rather than increment at some key areas have also had a negative impact on revenue mobilisation by public agencies in the country.

“Despite government’s revenue measures within [the] mid 2018 and 2019 budgets, weak revenue mobilisation remains a problem in 2019, such that budget execution data for the first quarter of 2019 shows that revenue and grants were 17.9 per cent below targets, with GH¢10.6 billion mobilised against a projection of GH¢12.4 billion,” the Researcher opined.

He added further that as revenue expectations were not fulfilled, budgeted capital expenditure was increasingly sacrificed to protect the government’s deficit reduction goals.

The Central Government has, however, tightened expenditure within the 2017-2018 fiscal year.

A lot of the huge expenditures, per their research, were also attributed to the government’s ‘elephant-sized’ educational policies from the basic to the senior high level, where it has successfully implemented the Free Senior High School policy since September 2017 for all Ghanaians students of school-going age, doing so through borrowing.

The IFS, therefore, opined that the government will have to come with a clear means of funding many projects and reduce the borrowing.

Mr. Leslie Mensah also stated that there are many initiatives which the government needs to cut down to reduce its expenditure.

He made mention of the Nation Builders Corps (NABCO), where the majority of the youth recruited, per their research, were doing virtually nothing in their various sectors, yet they are been paid periodically, and it is draining the state’s finances.

They, therefore, advised that the government should put the NABCO recruits to use to fulfill the purpose of their recruitment at their various centers.

They also advised the government to make the recently erected Fiscal Disciplinary Committee that the Vice President holds a key position within it to be a private entity in order not to be influenced politically in one way or the other, but rather, stand on its feet and deliver its works effectively, criticise the government when the need be, and function for the benefit of the nation.

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