The government has been urged to reintroduce the road toll system to increase revenue for accelerated development.
According to the Director of the Institute for Statistical, Social and Economic Research (ISSER) of the University of Ghana, Professor Peter Quartey, the Ministry of Roads and Highways could introduce an electronic pass (E-pass) system through a public-private partnership (PPP).
“It is about time the government revisited this issue of the road tax system to address the revenue gaps that exist in the economy," he said.
Prof. Quartey was delivering a lecture on ‘The global economic situation — Impact on sub-Saharan African (SSA) countries’ at ‘The Cedi Summit’ in Accra yesterday[June 27, 2022].
It was organised by Citi TV as part of its 2022 Citi Business Festival, in partnership with ISSER and ABSA Bank Ghana.
The day’s forum focused on the state of the global economy and its effects on sub-Saharan African countries.
Participants analysed the various policy response options open to governments and examined the feasibility and implications of possible solutions for SSA economies in general and the Ghanaian economy in particular.
Wrong signal
Prof. Quartey said “the outright removal of road tolls is not in the interest of the government, since it sends the wrong signals to private investors who wish to express interest in a PPP arrangement”.
On the usual congestion at toll gates, he said that could be addressed through an efficient E-pass system.
“If you make roads free, how do you encourage a private business person to come in? I think we need to revisit this issue and take corrective measures that have been proposed and evaluate them," the director added, saying similar E-pass systems were being operated in some parts of the subregion.
Fiscal consolidation
On fiscal consolidation, Prof. Quartey called for aggressive domestic revenue mobilisation through efficient tax and non-tax revenue generating measures.
He mentioned property rate as one of the areas that could be looked at for revenue generation, saying only GH¢468 million was earmarked for that sector in 2022.
He suggested that more revenue could be mobilised on the value of properties submitted to the various banks as collateral.
He also called for “aggressive and innovative revenue mobilisation measures such as digitalisation at revenue collection points and the implementation of revised Tax Exemption Bill".
According to him, import exemptions amounted to GH¢4.011 billion in 2021 and GH¢2.388 billion in 2022, excluding other domestic tax exemptions.
He suggested other measures such as the regular audit of public institutions and surcharging or prosecution of culprits of audit infractions and the promotion of automation at revenue collection points for fees.
Also, state-owned enterprises should be run like businesses, with qualified persons appointed to head those institutions, with clear performance targets, he added..
Policy options
Among policy options Prof. Quartey recommended a review of the salary structure of public sector workers and the implementation of labour market survey reports to minimise labour agitation.
He also called for a review of the various levies on petroleum products and interventions to cushion fuel consumers, particularly the vulnerable segment of the population, adding: “I don't support blanket subsidies.”
Source: graphiconline.com
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