A former deputy commissioner of the Internal Revenue Service (IRS) has appealed to the government to consider scrapping certain tax exemptions being enjoyed by the Agricultural Development Bank (adb) and rural banks in the country that have grossly abused their mandate.

George K. Adeyiga made the call in a presentation yesterday in Accra at a stakeholders’ forum organized by the Ghana Integrity Initiative (GII) and Christian AID, Ghana on alternative approaches to widening the tax base in the country.

The forum was aimed at helping to pluck the leakages in the tax system.

According to him, rural banks and the agricultural development bank have abandoned their traditional roles for commercial banking.

“The rural banks and adb should have their exemptions scrapped, particularly the Agricultural Development Bank, for the gross abuse of their mandate,” said Mr. Adeyiga.

Mr. Adeyiga argued that “most tax incentives in Ghana are not functional and are profit redundant which need scaling back or elimination.”

According to him, the nation continues to lose huge revenues to tax incentives annually even though these monies could be used to better the lives of the ordinary Ghanaians.

He said ironically as the state throws away more revenue to due to so-called tax incentives and holidays, it continues to suppress the poor by relying on Value Added Tax (VAT) to make up for the loss revenue.”

It is highly unfair for foreign and some local firms to be given tax incentives while VAT is constantly being slapped on such products as sachet water and others.

According to him, widening of the tax base for improved and sustainable revenue is inevitable if significant progress is to be made in the nation’s developmental agenda.

Mr. Adeyiga stressed the need for malpractices in the tax administration system to checked and corrected.

He stressed that “there is the need to check the uncontrollable outflow of resources through widespread tax malpractices, corruption and unprofitable tax incentives in the tax system which are the bane to maximum revenue generation.”