Government has been charged to do more through digital means to increase significantly the country’s revenue mobilisation.

According to the Managing Director of Strategic Mobilisation Limited, Christian Sottie, government must strive to collect adequate taxes from the informal sector.

Though government has implemented some strategies to ensure tax compliance, Mr. Sottie who is a former Controller and Accountant General believes the best way to complement government’s effort of increasing revenue is to ensure that businesses in the informal sector do not evade tax payment, going forward.

Speaking to Joy Business, he said, “if you look at the tax regime, we really have a fundamental problem. 80% of our economy is made up of the informal sector and 20% the formal sector. Meanwhile, the formal sector pays about 90% of the taxes, whiles the informal sector pays less than 10% of revenue. This means a chunk of the population is not paying taxes, yet we need to address our revenue fall to match other economies in our tax to Gross Domestic Product ratio.”

“We can only achieve this if we bring more people into our tax net. Digitisation is the way to go. All our tax collection mechanism must be automated to enable us rope in more revenue from those who are not paying taxes”, Mr. Sottie explained.

Strategic Mobilisation Ghana Ltd is the country’s-first digital project to monitor petroleum products across 16 depots. It has so far mobilized ¢1.0 billion of revenue within its 10 months of operation for the government.

In Ghana, tax avoidance and evasion is widespread, mainly in the informal sector, in which 86% of the country’s workforce is employed. This Strategic Mobilisation Ghana believes it would help address the problem.

With high incidence of tax evasions and avoidance within the informal sector of many developing countries, widening the tax net to generate more revenue, without resorting to increasing tax rates, may enhance economic growth, Mr. Sottie stated.

Many developing countries like Ghana suffer from huge financing gaps/constraints that inhibit public sector investment in roads, energy, education, and infrastructure among others.

Ghana, for instance, continues to record a high budget deficit partly on account of a low tax revenue.