October 23, 2021
Business Featured

VP Bawumia Launches RACE Initiative To Increase Domestic Rev …

The Vice President, Dr Mahamudu Bawumia, has launched a multi-agency initiative designed to increase domestic revenue mobilization, broaden the tax net and ensure compliance with tax obligations.

Known as the Revenue Assurance and Compliance Enforcement (RACE), the initiative is envisioned as a major effort to block leakages and raise domestic revenue mobilization in order to address the economic challenges arising from the Covid 19 pandemic and fits into President Akufo-Addo’s determination to seek fiscal sovereignty for a Ghana Beyond Aid.

Speaking at the launch in Accra on Wednesday, August 25, 2021, Vice President Bawumia expressed confidence that RACE would help raise the contribution of domestic revenue mobilization to GDP.

“As the last line of defense in revenue mobilization, RACE is expected to identify and eliminate revenue leakages while reinforcing the culture of compliance, especially in the areas such as petroleum bunkering, gold and minerals export, port operations, transit goods, warehousing, and free zones operations.

“The key strategies that are being rolled out will target those major potential tax payers who are now non-tax compliant.
“The effectiveness of the RACE Initiative depends on the ability to leverage on technology and to integrate the rich databases from the Ghana Card, the TIN, Digital Address system, Passport and DVLA databases amongst others. The timing of the implementation of the RACE Initiative rides on the back of the integration of the diverse databases now available for planning purposes.”

Commending the Ministry of Finance and its agencies for the design and implementation of RACE, Vice President Bawumia emphasized:
“This Initiative allows us to reset the resource mobilisation framework and to challenge ourselves to new heights in public finances, even as our economy strongly rebounds from the devastation of the COVID-19 Pandemic. We expect that RACE will power the efforts of Government to stay the course in terms of its economic targets and to return the economy to a path of fiscal sustainability by 2024.”

Reminding Ghanaians of various interventions rolled out by Government at the height of the Covid crisis, Dr Bawumia indicated that government’s ability to continue with some of the social interventions and much needed support to the private sector depends on our ability to accelerate our domestic revenue mobilization.

“The unfortunate reality is that our progress in domestic revenue mobilization could be better than what we have now. The reasons: the commitment to paying taxes is low. Some tax laws are complex and do not encourage compliance. There is also a school of thought that those who must enforce compliance are not without blame. Our challenges are in enforcement and compliance.

“Overall tax compliance from personal income to corporate profit taxes remains low. Non-compliance means the public purse is denied significant amount of revenues. Moreover, tax avoidance and tax evasion schemes undermine public trust in the integrity and fairness of the tax system. Together, they create huge revenue gaps between what is due the public purse and what is actually collected.”

There is a “moral and operational imperative” to implementing Revenue Assurance and Compliance Enforcement (RACE)” he stated.

“RACE has real and consequential effect on our socio-economic advancement as a country. Let us make it work.”

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