Target big companies to assist with debt to GDP - Dr. Domfe

An economist with the University of Ghana, Dr. George Domfe, has called on the government to target corporate tax especially from some of the big names in the industry, to help it close up its high debt stock.

He explained that there is no doubt that the coronavirus greatly affected the country’s economy, sending into high unexpected and unplanned debts but with strategic planning, the country can rake in a lot of revenue to help it manage its debt to GDP.

He made this known in an interview with GhanaWeb ahead of the government’s budget presentation in Parliament tomorrow.

“We have very big companies that are doing very well in Ghana. Talk about MTN, GHACEM, ECG, both government and non-governmental – they’re doing quite well. And you know one thing, their existence is based on the consumption capabilities of Ghanaians and if the economy is down, the purchasing power goes down and nobody will have enough to patronize their goods and services.

“Therefore, government can negotiate with them – maybe the top 100 companies or the top 200 companies in Ghana, engage them and let them pay a little more – just a little about 1%, that is going to rake in quite a lot of revenue for the country. You know last year what happened when government projected to spend 85 billion, they ended up spending almost 100 billion. That notwithstanding, our revenue was very poor. We projected 66 billion and we ended up with just 45 and so over 60 billion is left to be financed with loans.

“And so last year, we lost so much and that has pushed our debt to GDP level beyond the reasonable limit. Therefore, it is important that government puts together a framework to rake in more revenue in more revenue and save the economy from falling into a pit,” he said.

The Majority Leader in Parliament, Osei Kyei-Mensah-Bonsu, has been asked by President Nana Addo Dankwa Akufo-Addo to represent minister-designate for Finance, Ken Ofori-Atta, in reading the budget after the latter left for the United States for further medical care.