A finance and economics lecturer at the University of Ghana, Professor Godfred Bokpin, has criticised Ghana's current taxation strategy, arguing that the nation cannot tax its way out of poverty.

Speaking on Joy FM’s Super Morning Show, Prof Bokpin highlighted the inefficiencies and inequities within the country's tax system.

He stated that a sizeable part of the economy is not captured in the tax net.

“A sizeable portion of our economy is not taxable. We have not grown a taxable economy. The current data tells us that approximately 42% of this economy is contributing 86% of the tax revenue.

“Almost 58% percent of the economy is contributing only 14% to the economy’s taxes,” Prof Bokpin revealed.

He pointed out that the financial and insurance sectors, which constitute less than 5% of Ghana’s GDP, are disproportionately contributing over 23% of the nation’s taxes.

This heavy reliance on a small segment of the economy for tax revenue is unsustainable and unfair, according to Prof Bokpin.

“So already the taxable aspect of the economy is over-taxed. The more you want to generate revenue through taxes, you’ll be burdening the faithful few,” he said.

Prof Bokpin also noted that the high tax burden has led to evasive behaviour among businesses and individuals.

“Look at what is happening right now, people are now adopting innovative ways to offset the regulatory burden of tax. Why are people now clearing their goods from Togo and Cote d'Ivoire and transporting them through unofficial borders? Look at the level of taxes you pay when you are clearing goods at the port.”

He argued that the current taxation approach is counterproductive and creates a financially repressed society, benefiting only the political elite.

“How can a country think like this and think that they can come out of poverty? You can’t tax your way out of poverty. You are creating a financially repressed society and it is simply because those who have gained from it are the politicians and elites.”