Curbing illicit financial flows will be one of the surest ways for the government to raise money to fund the budget and other development projects, Dr Abdallah Ali-Nakyea, Senior Lecturer of University of Ghana Law School, has said.

He alleged that in the mining sector alone, the government lost US$6 billion every year to illicit financial flows through transfer pricing and under invoicing.

Speaking at the Multi-Stakeholder Business Integrity Forum organised by the Ghana Integrity Initiative (GII), the local chapter of Transparency International, Dr Ali-Nakyea, said there would be no need for government to borrow to meet the financial needs of the country if illicit financial flows from the country was nipped in the bud.

The programme which was held under the auspices of the Dutch government and on the theme “Implications of the tax policies per the 2021 Budget Statement and Economic Policy on businesses in the phase of the COVID-19 pandemic,” brought together participants from the private sector, civil society and Ministries, Department and Agencies to discuss the effect the 2021 tax policies would have on businesses in the country.

Dr Ali-Nakyea indicated that, the focus of the government over the years had been on taxes to raise more financial resources to finance its programmes instead of blocking the tax leakages.

He said the country’s revenue would not be enough if leakages in the tax administration were not dealt with.

He said the new taxes introduced in the 2021 budget of the government, such as the introduction of the Financial Sector Levy, Energy Sector Recovery Levy, Sanitation tax, would have serious repercussions on businesses and culminate in the increase in the prices of goods and services in the country.

Dr Ali-Nakyea called for the improvement of tax education to improve tax compliance of businesses and the citizens.

“Government must implement the Electronic Point of Sale to verify sales data and VAT collection and taxation of the digital economy,” he said.

Dr Ali-Nakyea also stressed the need for the government to review the tax exemption regime and re-examined the appeal processes and the requirement of payment of deposit before an objection to a tax.

The Head of Tax Policy Unit of the Ministry of Finance, Daniel Nuer said the new taxes were to raise additional resources to finance the budget.

He said the government could not continue to borrow and there was the need to raise financial resources to fund the budget and stressed that the citizens and businesses must help government to raise more financial resources.

The Chief Executive Officer of Ghana Association of Bankers, John Awuah said banks were ready to support the government to raise additional revenue, but said the association was concerned about the overly taxation of the banking sector.

The Director, Policy and Research of Association of Ghana Industries, John Defor said the COVID-19 have had serious effect on businesses and the imposition of new taxes would further compound the challenges facing businesses in the country.

He disclosed that the tourism industry lost more than $171 million to the coronavirus pandemic.

He lauded the government for the waivers given players in the tourism and hospitality industry, but said the waivers should have been on the input taxes instead of the output tax.

The Executive Director of GII, Mrs Linda Ofori-Kwafo in a speech read on her behalf, said the programme was to create a platform for stakeholders, particularly, selected private sector and public sector institutions, civil society and media to identify emerging issues hampering the ease of doing business in Ghana.