• Government has been tasked to rope in more digital structures to generate revenue
• The informal sector has over the period evaded paying taxes
• The informal sector, experts say account for almost 70% of GDP
Christian Sottie, Managing Director of Strategic Mobilisation Limited, has charged government to rope in more digital structures and simplified ways in the area of revenue mobilisation.
This he believes will ensure taxes are generated from the informal sector, which experts say, largely account for almost 70 percent of the country’s Gross Domestic Product.
In an interaction with Joy Business, Sottie said despite efforts made by government to increase revenue, more needed to be done to ensure that informal sector does not evade taxes.
“If you look at the tax regime, we really have a fundamental problem. 80% of our economy is made up of the informal sector and 20% the formal sector. Meanwhile, the formal sector pays about 90% of the taxes, whiles the informal sector pays less than 10% of revenue. This means a chunk of the population is not paying taxes, yet we need to address our revenue fall to match other economies in our tax to Gross Domestic Product ratio,” Sottie explained.
He added that, “we can only achieve this if we bring more people into our tax net. Digitisation is the way to go. All our tax collection mechanism must be automated to enable us rope in more revenue from those who are not paying taxes.”
Meanwhile, Strategic Mobilisation Limited, which is Ghana’s first digital project that monitors revenue of petroleum products across 16 depots, has thus far mobilized GH¢1 billion of revenue for government within the first 10 months of operations.