Browsing by Author "Andoh, Francis Kwaw"

Now showing 1 - 1 of 1
  • Thumbnail Image
    Item
    Revenue productivity of value added tax in Ghana
    (University of Dar es Salaam, 2017) Andoh, Francis Kwaw
    After almost two decades into the implementation of value-added tax (VAT) in Ghana, not only its contribution to total tax revenue consistently remains below 31 percent, but also the tax-to-GDP ratio is still below the sub-Saharan average. Using both quarterly data from 2000-2014 and annual data from 1960-2015, and employing several econometric methods: dynamic ordinary least squares, fully modified ordinary least squares, the Divisia Index approach, Autoregressive Distributed Lag and Vector autoregressive, this thesis examines three broad questions: (i) Is Ghana’s VAT revenue growing enough to ensure effective fiscal consolidation? (ii) Is there any scope for further increase in VAT revenue collection and (iii) Is aggregate tax revenue better off with the adoption of VAT? The results show some evidence of growth in VAT revenue, however the growth reduces drastically in the presence of changes in discretionary tax measures. Moreover, the operation of the VAT in Ghana is characterised by periods of over and under exploited taxable capacities, however, in totality, there seems to be little scope for further increase in VAT revenue given the existing base. More striking, the study finds no evidence that the adoption of VAT has improved aggregate tax revenue shares. The study, therefore, argues that the recent over concentration on VAT as the panacea for the country’s revenue challenges may endanger the quest for fiscal adequacy and independence. An appropriate balance of tax-mix is therefore recommended. A critical examination of the existing VAT discretionary policies, especially those that involve the elaborate provision of exemptions is also recommended.