An economist, Professor Godfred Bokpin, has urged the general public to brace themselves for an imminent tax hike, following the International Monetary Fund’s (IMF) endorsement of Ghana’s bailout request.
In an interview with JoyNews on Wednesday, he elaborated on the reasoning behind this forecast, citing the government’s obligation to achieve a specific tax to GDP ratio during the programme evaluation.
“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 let’s say 18%. The strategy in increasing the tax revenue could negatively impact businesses if we don’t adopt optimal tax handles,” Prof Bokpin said.
Following the International Monetary Fund’s (IMF) long-awaited approval, Ghana’s Program request for a $3 billion Balance of Payment support to restore economic stability has been granted. In an official press release, the IMF stated that this endorsement would facilitate the prompt release of approximately US$600 million to Ghana.
“The program is based on the government’s Post COVID-19 Program for Economic Growth (PC-PEG), which aims to restore macroeconomic stability and debt sustainability and includes wide-ranging reforms to build resilience and lay the foundation for stronger and more inclusive growth,” parts of the statement read.
Meanwhile, Professor Bokpin emphasized the necessity for Ghana to implement stringent governance measures and productivity-boosting reforms to augment the benefits derived from the International Monetary Fund.
He asserted that the government must undertake substantial efforts to establish a sturdy macroeconomic stability in the near to medium future, particularly in light of the country’s anticipation of receiving the initial portion of the $3 billion facility from the IMF.
“What then is important is that how do we complement gains from the IMF, short term usually, by the necessary governance productivity and enhancing reforms that Ghana needs to do?” he further quizzed.