The Role of Revenue Mobilization in Economic Growth and Development in Ghana
CHAPTER ONE
OBJECTIVES OF THE STUDY
The main objective of this study is to find out the role of revenue mobilization on economic growth and development, specifically the study intends to:
- Determine the impact of tax on economic growth in Ghana
- Investigate the role of revenue mobilization on economic growth and development in Ghana.
CHAPTER TWO
REVIEW OF RELATED LITERATURE
Reformation in Tax Systems to Facilitate Revenue Mobilization
According to Sidelnykova and Maliuzhets (2019), in order to facilitate revenue mobilization, a number of reforms are required to be made in the tax system and the tax administration in order to make it less rigid and complex. Previously most of the reforms concentrated on the reforms of the structure of the tax system that involved making alterations in the tax base and tax rates. At that time, most nations tried to maintain high insignificant income tax rates as well as immense and fluctuating coverage and rate framework of indirect taxes. But things have changed a lot these days, as tax reformations need to abide by the tax administration keeping in mind the interests of the taxpayers. The reformation in tax systems is not about collecting more revenue but it is about enhancing the basic rudiments of the tax systems which in turn can sustainably increase the revenue and mobilize it in the entire economy of a nation. This helps to strengthen the tax administrative structure as well as building a dynamic economy which helps in the growth and development of the nation. Now reformation in the tax system is about reconciling and reaching a settlement among the challenging objectives like equity, adaptability, balance in macroeconomics, and viability in the environment. An efficient tax system helps to build a mutually beneficial relationship between the government and the citizens which ensures deliverance of the important public services. Van den Boogaard et al. (2018), stated that a flexible and adaptable tax system guarantees citizens of improved governance and in turn, the government is assured of a more predictable source of income. But the government needs to ensure that the tax system is fair and equitable so that it can balance the goal of enhanced revenue mobilization by diminishing the costs of compliance and hence in turn promoting positive growth of the economy of the nation. The World Bank which is the largest provider of development finance has been assisting around 77 countries in resource mobilization having around 173 active engagements. Akitoby et al. (2018), commented that as a result, the revenue generation of the nation increases considerably which helps the nation to do work more on its development and growth. The effective mobilization of the revenue earned due to improved and reformed tax systems helps to enhance the economy of the country and gives it a momentum to work more for the citizens of the country.
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
RESEARCH DESIGN
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
INTRODUCTION
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of eighty (80) questionnaires were administered to respondents of which only seventy-seven (77) were returned and validated. This was due to irregular, incomplete and inappropriate responses to some questionnaire. For this study a total of 77 was validated for the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain the role of revenue mobilization in economic growth and development in Ghana. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of the role of revenue mobilization in economic growth and development in Ghana Summary
This study was on the role of revenue mobilization in economic growth and development in Ghana. Three objectives were raised which included: Determine the impact of tax on economic growth in Ghana and Investigate the role of revenue mobilization on economic growth and development in Ghana. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from Ghana central bank. Hypothesis was tested using Chi-Square statistical tool (SPSS).
Conclusion
The first step in improving corporate tax revenue is an establishment of taxpayer databases. Infrastructure is critical for making other interventions possible and effective. Since economy payment systems are important for easily accessing information about taxpayers, encouraging and compelling digital payments could help improve revenue mobilization. Deterrents and other messages to boost taxpayer morale, if appropriately designed, could also be effective in encouraging tax filing and compliance. The introduction of minimum tax schemes and tax deductible laws can be promulgated to reduce substantial corporate tax evasion and increase domestic revenue mobilization. Fully refundable withholding taxes, especially for online transactions, could be introduced to secure revenues.
Recommendation
The study recommends that the government should keep in mind the macroeconomic environment and tax expenditures such as interest payments, grants to other government units, and compensation of employees in particular when mobilizing import tax revenue. Specifically, the study suggests that the exchange rate policies and structural policies such as price liberalization need to be well coordinated to ensure broad based macroeconomic stability and mobilization of import tax revenue in Ghana.
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