Plug tax loopholes and cut expenditure waste – John Kwakye tells govt

The Director of Research at the Institute of Economic Affairs (IEA), Dr John Kwakye, has told the Mahama administration to plug all the loopholes in the tax system and also cut wasteful expenditure.

He expresses the view that these actions, when taken by the government will compensate for intended tax removals.

“Plugging tax loopholes and cutting expenditure waste will be enough to compensate for intended tax eliminations,” he wrote on his X.

Plugging tax loopholes and cutting expenditure waste will be enough to compensate for intended tax eliminations.

— J. K. Kwakye (@JohnKwabenaKwa1) February 16, 2025

Meanwhile, President John Dramani Mahama has stressed the need to strengthen Ghana’s Fiscal Responsibility Act and the Public Financial Management Act.

He says it is important to cut out waste and reduce corruption.

These are some of the critical issues that must be addressed,  he assured.

Speaking at the Africa Business Forum 2025 on Monday, February 17, in Addis Ababa, Ethiopia, he said “In a crisis, the first thing that you do is to focus on stabilising, and that is what we are focused on—bringing interest rates and inflation down, stabilising the currency, and dealing with debt overhang. That is where our focus is for now,” he said.

He further emphasized the need to understand the factors that led to the crisis and to take steps to ensure it does not recur.

“At the same time, we must analyse the factors that brought Ghana to this point and implement steps to ensure we do not end up in this situation again. That will entail strengthening the Fiscal Responsibility Act and the Public Financial Management Act.

“We need to cut out waste and reduce corruption. These are some of the critical issues that must be addressed,” he assured.

At a separate forum, President Mahama also said that it has become necessary for his administration to look at the whole tax handles, rationalize them, and make them more transparent, and easy to understand.

This, he said would ensure better tax compliance.

Speaking in an interview with Bloomberg TV at the Munich Security Conference last Monday, President Mahama said “Because of the target of achieving 24 percent revenue to GDP by 2028, the program required that revenue should continue increasing at a certain rate.

“Unfortunately, what the previous government had done was just to slap on more taxes and we had got into a stage where the more taxes that were put on, the less revenue that came in.

“And so it’s necessary for us to look at the whole tax handles, rationalize them, make them more transparent, easy to understand, so that we can have better compliance.”

Addressing Ghana’s ongoing debt restructuring efforts, President Mahama acknowledged the significant repayments due this year, particularly domestic debt obligations exceeding $15 billion in 2025.

He highlighted his administration’s proactive measures to manage these challenges, including reactivating the country’s sinking fund to facilitate debt repayments.

“We also have the issue of the debt restructuring and humps that have been created this year, we have to pay in excess of 15 billion (dollars) on the domestic debt exchange,” he noted.

“So what we’ve done is to reactivate the sinking fund and put more resources into it to take care of the repayments that have to be made this year.”

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