Former Finance Minister Seth Terkper has once again bemoaned the country’s debt collection methods as well as its revenue performance over the years.
This, according to him, can partly be blamed on non-response to the rebasing of the country’s GDP.
He made these assertions in a post-budget dialogue organized by Citi TV and the University of Professional Studies, Accra (UPSA) on Thursday, March 18.
“Our debt collection effort is flat. One reason it’s flat is because of rebasing, and not because GRA is not making effort. What is the effect of rebasing on debt? The tax effort of our national output is how much you collect from everybody’s pay. So you bring together everybody’s pay and find out how much percentage we are collecting from the population. So if the income is 100 and you’re collecting 15%, it means that government is taking 15% of the total income we’re collecting. That’s what the tax to GDP ratio means,” he explained.
He added, “Now if you rebase, your 100 becomes 150 or 200 so the same 15% will now be divided by 200 and it’ll give you 7.5 instantly and it means GRA will have to put in more effort.”
Mr. Terkper further called on the Institute of Chartered Accountants to, as a matter of urgency, clarify the computation of debt and revenue on the national front.
According to him, the loud silence of the Institute on the varying standard of calculating national debt and revenue does not help the system.
“Let us have a consensus on how we calculate revenue, expenditure and debt. Let me take the opportunity to call on the council of the Institute of Chartered Accountants, please give us a standard. Adopt IPSAS. It will settle the question. I hear a lot of noise about auditing, ethics issues, methodology issues, independence issues, etc. These are the core pf auditing. Again, the Institute of Chartered Accountants the silence is deafening,” he lamented.
The post-budget dialogue themed ‘Breaking down Ghana’s Red 2021 budget’, was focused on sharing effective alternatives that government can consider to achieve its targets pertaining to revenue, expenditure and debt.
The participants in the dialogue included top personalities from academia, government representatives, captains of industry, and the public.
Some of the other speakers at the programme were Maryam Kriese, a finance lecturer at UPSA, Adobea Asiama-Aboagye from the Association of Ghana Industries, and Alex Ampaabeng, a tax policy analyst.