Ghana’s 2025 Budget: Insights from Economic Experts on Revenue Issues and Policy Challenges

The 2025 Budget for Ghana faces scrutiny due to significant revenue gaps and economic challenges. Key experts highlight concerns about the sustainability of government funding and the need for strengthening private sector involvement in infrastructure. Critiques have also been directed at the inefficient management of property tax collection and the removal of certain tax handles, underscoring the urgent need for revised fiscal strategies.

Economic experts have raised concerns regarding Ghana’s 2025 Budget, particularly the revenue gaps and economic challenges facing the country. Development finance specialist Eric Boachie Yiadom has acknowledged the government’s strategy to increase revenue from the mining sector but cautioned about implementation effectiveness. In a presentation by Finance Minister Cassiel Ato Forson, the government outlined its objectives to stabilize the economy amidst financial strife inherited from the previous administration.

Yiadom analyzed the government’s fiscal policies on the Asaase Breakfast Show, emphasizing the need for a balanced approach regarding the mining sector’s contribution to revenue. He stated, “Moving income from the mining sector and increasing it to that threshold will bring in revenue, but we must also consider the implications for sector activities.”

Despite the commendable efforts by the government to raise funds, Yiadom warned that the dependence on central funding is unsustainable. He advocated for empowering the private sector to assume responsibility for infrastructure projects, stating, “Government cannot do everything. Until we find ways to support private businesses… we will always be seeking more funds that will never be enough.”

Tax revenue mobilisation also presents a significant challenge with noted shortfalls. Last year’s total expenditure amounted to GHC279 billion, while revenue just reached GHC150 billion, leading Yiadom to assert the need for strategic re-evaluation of the revenue management systems.

In a related critique, Priscilla Twumasi Baffour, a senior lecturer at the University of Ghana, expressed disappointment with the government’s decision to revert property tax collection to district assemblies, calling it a missed opportunity for increased efficiency. She remarked, “Property taxes are an untapped goldmine. Accra’s skyline is filled with high-value properties, yet revenue collection remains inefficient.”

Baffour further raised concerns over the ability of local authorities to manage this task effectively and stressed the importance of modern systems in tax collection. She noted, “We have seen studies where automated, digitalised processes significantly increased tax collection. The concern is that without proper evaluation and enforcement, the inefficiencies will persist.”

Furthermore, her reservations about the elimination of certain tax components, such as the betting tax, pointed to missed potential revenue. She posited, “I think it was a revenue handle that should have been kept. If people are earning income from betting, they should be paying taxes on it.”

In summary, Ghana’s 2025 Budget faces critical scrutiny from economic experts regarding revenue gaps and sustainability concerns. Experts like Eric Boachie Yiadom stress the importance of enhancing private sector roles in infrastructure development, while Priscilla Twumasi Baffour highlights the inefficiencies in tax collection processes. The overall challenge lies in the government’s approach to mobilising revenue effectively and sustainably to meet increasing financial demands.

Original Source: www.asaaseradio.com