Raise revenue to bridge rich-poor gap — Researchers
Economic and Inequality Policy Researchers in Ghana and Kenya have called on the government to focus on raising more revenue from high networth individuals in the country, as well as through other tax regimes such as property rates, direct and corporate income taxes.
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Such a measure, they said, would ultimately create a just and fair society, reduce inequality and the gap between the rich and the poor. The researchers, who made the call in Accra yesterday, were an Economist and Professor of Finance at the Department of Finance, University of Ghana (UG) Business School, Godfred A. Bokpin, and the Inequality Policy and Research Advisor of Oxfam International in Kenya, Anthony Kamande.
They further explained that imposing more consumption-based taxes such as Value Added Tax (VAT), fuel and the Electronic Levy(E-levy) were not sustainable as it would rather create an unsafe environment and breed social vices.
This was during the closing of the two-day sixth International Research Conference organised by the College of Humanities, UG. It was themed “Addressing inequalities:Building socio-economic and environmental resilience for sustainable development.”
The conference was part of a 10-year strategic plan to put the UG on the world map as a world class research intensive university. It showcased research conducted by some fellows from Nigeria, Kenya and other African countries.
Inefficiency
Prof. Bokpin emphasised that “there are big companies that are making huge profits but are not paying the required taxes that they should. Ghana's corporate income tax inefficiency is more than 80 per cent.”
“Because we are not making progress on those lines we are burdening just the few who are complying and faithful in paying taxes. A research conducted two years ago showed that if we had been able to effectively tax high-net worth individuals in the country, we would have been able to raise more than $500 million annually from the super-rich individuals in this country” the economist stated.
He acknowledged that although some progress had been made in bridging the inequality gaps, looking at the various perspectives such as economic, social and political a lot more needed to be done.
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“We are not talking of eliminating inequality, especially from its measurability, because a certain level of inequality is good but beyond a certain point it becomes inimical to growth and development”
“So if you look at it across Africa we have gone past that threshold where inequality is beneficial and therefore it is quite detrimental now,” he argued. The Professor of Finance said it was unfortunate that an Oxfam data showed that just one per cent of people in Africa controlled over 63 per cent of wealth that was generated while the 99 per cent were left to share the remaining 37 per cent of the wealth.
“The inequality is getting worse daily and it is neither safe for the haves nor the have-nots because if we create an unjust and unequal society it is never safe and sustainable. It breeds social vices, and it is the reason why you see that at the end of the day even the rich will spend more trying to protect themselves from the majority who don't have.” Prof. Bokpin added.
Oxfam
For his part, Mr Kamande stressed the need for African governments to fight inequality through what he described as progressive taxation. He mentioned inheritance taxes, property taxes, saying that African countries could collect about $36 billion annually if they were able to collect property taxes effectively.
The researcher further indicated that high-net worth individuals on the continent needed to pay taxes on at least 60 per cent of their total incomes. He also called on African governments to ensure that they empowered tax authorities to arrest those he described as “tax cheats" on the continent.
Natural resources
A Professor of Historical and Contemporary Studies at the Soderton University in Sweden, Prof. Anne Kubai, made a virtual presentation on ensuring equality in sharing revenue accrued from Africa's natural resources.