President of the African Center for Economic Transformation, (ACET), has said tax exemption to foreign companies is undermining growth in Africa.
Dr K.Y Amoako bemoaned the lack of stringent measures by governments to mobilize tax from international firms investing in African countries.
He said many countries including Ghana have given too many tax exemptions to foreign companies at the expense of their weak economies thereby posing a challenge for domestic revenue mobilization.
“Most African countries, our domestic savings or resource management is still very low, our tax to GDP ratio is still very low compared to countries in Asia and other parts of the world that have transformed; so that’s one of the key areas that we need to look at.”
He added, “How can we mobilize our own resources, our own savings to finance our developments? For example, there are too many tax exemptions from East African countries so they foreigners and other businesses we need to tighten that up.
Dr Amoako said “I think there is a lot more we can do in property tax rates – people have houses, estates they don’t pay any taxes. So raising taxes is important but you do it in such a way that it can promote growth”
He made the revelation in an exclusive interview with JoyBusiness after addressing the opening session of the ongoing 2018 African Transformation Forum in Accra.
The forum for 2018 is expected to build on progress since the Kigali conference and generate increased momentum for sustainable and inclusive growth.
“We are still not progressing as compared to the Asian economies in terms of GDP growth, debt ratio among others,” he said.
Dr Amoako added, “This is what the conference is seeking to look at, thus strategies to overcome the challenges.”
ACET has championed the transformation agenda for the past ten years through conferences and dialogues with policymakers and the private sector players.