In the foreword to the 2017 Budget Statement, it is stated among others, “…The vision of this government is one of hope, jobs and wealth creation and a strong economy that supports a thriving private sector.

Thus, the 2017 Budget Statement and Economic Policy presents strategies and actions that will move this economy from its current state into a full-fledged middle-income economy.

To achieve this vision, the government will do three major things:

• Raise more money by closing tax loopholes and leakages;

• Check inefficiencies and waste in how government spends your money; and

• Provide the enabling environment to stimulate business growth and encourage job creation through a number of policy initiatives…”

Much as it is heart warming that the government has boldly declared that it supports a thriving sector and is committed to making Ghana a full-fledged middle income economy, the reality is that very little, if any, can be achieved if the present circumstances of the private sector do not change as far as illicit trade is concerned.To change the present circumstances of the private sector, there is the need for a systemic, planned and well-executed strategy driven and owned by the government, public sector employees, the private sector, the security agencies and also the citizenry.

Illicit trade is said to be any practice or conduct prohibited by law and which relates to the production, shipment, receipt, possession, distribution, sale or purchase, including any practice or conduct intended to facilitate such activity.

Impact on governmet revenue

If the government is to succeed in raising more money by closing tax loopholes and leakages, then a critical look has to be taken at the increase in illicit trade. Illicit trade activities in Ghana include smuggling, cross border trade and uncontrolled transit of goods through Ghana.

In Ghana, our laws prohibit the importation, sale and distribution of uncustomed goods. Thus, when one buys alcoholic products, textile products or cigarettes, for instance, a conscious effort must be made to check whether such products were authorised to be sold in Ghana. Any member of the public or citizen who knows of a person(s) who is involved in illicit trade has a duty to report to the appropriate security agency(s) for the arrest and prosecution of such person(s). A citizen who does such a duty is helping to (1) prevent tax losses to the government and (2) helping to save lives as often illicit trade products do not meet stringent health standards required of the legal manufacturers of such products.

It is reported in the 2017 Budget that the total projected domestic revenue for 2017 is GH¢ 43,430.11 million or 21.4 per cent of GDP. Juxtaposed with other domestic revenue heads, tax revenue for 2017 alone is projected at GH¢34,382.10 or 79 per cent. This makes taxes the largest source of domestic revenue. In spite of this, illicit trade continues to challenge the government’s right to taxes available to be collected.

Threat to private sector

An illicit trade also threatens the existence and survival of the private sector.

From the Ghana Chamber of Mines, the Association of Ghana Industries (AGI), the Ghana Employers Association et al, the private sector is reeling under the effects of unbridled and a booming trade in illicit products. Some of the products that are suffering the effects of illicit trade are textiles, alcoholic beverages and tobacco products.

As illicit trade continues to boom, private sector companies whose products or competitor products are being smuggled in or traded on the illicit market are experiencing dwindling income streams and are also confronted with high production costs, laying off of workers or a complete fold up of operations.

Apart from the effects of illicit trade on the private sector, the government is also losing millions of cedis through the booming illicit trade.