Founder of the Dangote Group, Aliko Dangote, is urging African governments to incorporate tax cuts across some sectors of the economy to motivate individuals and businesses to stay committed in meeting their tax obligations.
Aliko Dangote who was speaking at a forum organized by the African Center for Economic Transformation in Accra said widening the tax net creates more revenue streams.
“I might not really pay you tax for five years, but when my tax is due, you will collect your own taxes. When you charge people so much that is when people will find avenues of dodging to pay taxes, so the less you charge, the more you can widen your net and collect a lot of taxes.”
On the issue of economic growth, Aliko Dangote believes Africa should be the food basket of the world considering its rich land resources.
He suggested Africa should focus on the private sector to diversify agriculture.
“We have not been able to diversify the economy of Africa today. Some countries while they have oil, once prices of oil are high will abandon agriculture and so many things. Today, Africa has 60% of land, and we should be the food basket of the world.”
The tax cut proposal made by Aliko Dangote comes on the back of Finance Minister Ken Ofori-Atta’s strong indication of possibly introducing new taxes during the mid-year budget review.
The Finance Ministry has over the past months indicated the need to review the county’s tax measures to make it more responsive to current trends.
The ministry has also argued that the review should help address challenges with revenue mobilization.
Ken Ofori-Atta has in conversations with journalists said all options are still on the table in terms of reviewing the current revenue measures.
Indications are also clear the Finance Ministry is likely to introduce new taxes due to mounting pressure on government from some donor partners to come up with a more sustainable way of dealing with the revenue shortfalls by increasing taxes.