‘Use taxes to push private sector’

A pro-active tax administration system that offers tax incentives to businesses is what Ghana needs to alleviate poverty and curb rural-urban migration, John Kofi Mensah, the Chief Executive Officer of First Capital Plus Savings and Loans Company Limited (FCP), has said.

“As a nation, there are two serious issues that confront us; these are poverty and rural-urban migration. The only way to address these crucial issues is through the private sector,” Mr. Mensah said

“If it’s addressed through the private sector, specifically through corporate institutions, then we will be building a good case. All that we have to do is to challenge the private sector to take it up.

“Corporate institutions would be willing to help fix our problems if they get tax incentives. So indirectly, instead of government taking up the responsibility to address these two issues, they can pass through the tax system to empower the private sector -- specifically corporate institutions -- to do so,” he said.

“More often than not, government has attempted to address these two issues -- but I think it is from a very wrong angle. Because they [government initiatives] can be ad hoc and because of limited resources they may not be sustainable.”

Chieftains of industry have continuously urged government to loosen its hold on the economy and empower the private sector to the take the lead role in driving the economic development agenda of the country.

The Association of Ghana Industries (AGI) and other business groups have also called on government to institute a clear-cut Public-Private-Partnership (PPP) policy that will encourage private investment in the power, housing and road sectors.

Conservative estimates by the government indicate that the country’s huge infrastructure deficit requires sustained spending of at least US$1.5billion per annum over the next 10 years to address the shortfall.

The deficit covers all the main infrastructure areas: roads, energy, water, aviation, housing, and ICT. In the housing sector, for instance, the government estimates that the country needs to build about a million more units to bridge the demand-supply gap.