A Ghanaian economist and professor of finance at the University of Ghana Business School (UGBS) has entreated Ghanaians, especially business owners, to prepare for an increment in taxes.
The Executive Board of the International Monetary Fund (IMF) approved Ghana’s $3 billion loan request on Wednesday, May 17, 2023, at a meeting in Washington, DC.
Reacting to this, Prof. Bopkin has stated that this will lead to an increment in taxes because the government would be obliged to meet a tax-to-GDP ratio during the review of the program.
Speaking in an exclusive interview with Joy News monitored by 1Family Radio, Prof. Bopkin noted that there are some targets the government must meet, and in order to do this, there might be an increment in taxes, especially for business owners.
“There are targets that we have to meet every six months of the program review. Part of the target may include increasing our tax-to-GDP ratio to about 18%,’’ he said.
He continued by saying that a rise in taxes will trigger the demise of numerous local enterprises due to the adverse effects the taxes will have on them.
“The strategy of increasing tax revenue can have negative implications for businesses if we don’t adopt optimal tax handling,’’ he added.
Prof. Bopkin furthered that in order to accelerate macroeconomic stability in the country, the government must strictly adhere to the reforms laid down by the IMF and also use the gains from the deal judiciously.
The question now becomes, “How do we balance benefits from the IMF, which are often short-term in nature, with the essential governance productivity and boosting reforms that Ghana needs to execute?’’ he quizzed.