Dr. Kwabena Duffour, Minister of Finance and Economic Planning, has stated that West Africa should be stern on tax evaders in order to maximize revenue through the indirect tax system.
At a recent conference in Turkey, a former senior economist at the International Monetary Fund (IMF) revealed that the sub-region and other less developed countries including Ghana lose revenue annually.
In 2008, the affected countries lost an amount of $20.2 billion at the end of the year through illicit financial flows, which is a form of illegal capital flight and occurs when money is illegally earned, transferred or utilized.
As a result of illicit financial flows, money intended to disappear from any record in the country of origin and earnings on the stock of illicit financial flows outside the country do not normally return to the country of origin.
“What we need is a capable tax administration system that is able to deal with tax evasion and criminal tax avoidance,” said the Finance Minister in a statement read on his behalf by a deputy Minister of Finance, Fifi Kwetey at the opening of the West African Tax Forum in Accra.
He noted that the adoption of indirect taxation, especially value added tax, is one of the important developments in taxation in modern times.
“In Ghana, the value added tax and tariffs on imports are a major source of government revenue and this trend is likely to continue as we grapple with the world economic crises and seek to increase economic growth,” he said.
Challenges in the tax system in the sub continent, he said, includes the complexities of taxation of African natural resources, the lack of exchange of information, difficulties associated with the taxation of international transactions.
He therefore urged delegates participating in the forum to come up with concrete strategies that would “go a long way to help African countries address these challenges.”
George Blankson, Commissioner-General of the Ghana Revenue Authority (GRA), in a welcome address, hinted that the challenges of indirect tax administration are formidable and “even more so for tax administrations that are in the process of tax reforms and modernization.”
He noted that Ghana’s plans to integrate the three main revenue agencies led to the establishment of the Ghana Revenue Authority two years ago.
Daniel A Witt of the International Tax Investment Center, which is hosting the forum with the African tax Institute and the Africa Tax Administration Forum, told DAILY GUIDE after the opening that the delegates, which included experts in tax policy, academia and industry, are expected to share experience and best practices.
The two-day forum, he said, would also provide a platform to conclude on how best to coordinate indirect taxes, among member states in common markets.
They would also look at issues regarding natural resource taxation and corporate taxation.
By Emelia Ennin Abbey