‘Digitisation Will Drive Down Interest Rates’

Vice President Dr Mahamudu Bawumia

GOVERNMENT SAYS its digitisation agenda will help drive down interest rates and enhance repayments by borrowers.

Vice President Dr Mahamudu Bawumia, who made this known at a public lecture hosted by the Ashesi University in Accra, said digitisation, was critical for assessing risk by lenders.

“Starting October 1, 2021, the Bank of Ghana has directed banks, telecommunications companies, fintechs, mobile money operators, utility providers, retailers, government institutions that offer credit to MSMEs, institutions that provide identification documents, entities that supply goods and services on a post-paid or installment basis, student loan schemes, etc. to provide information on credit behaviour of their clients to the Credit Reporting System.

“Ghana’s digitization programme, by achieving unique identity and providing unique addresses for properties should result in lower interest rates as the risk associated with bank lending would have been reduced,” he highlighted.

The Vice President also said “Thanks to the excellent monetary policy stance of the Bank of Ghana, bank lending rates have been on the decline from an average of 32% in 2016 to an average of 21% currently. One can expect further reductions as the full impact of digitization kicks in.”

Property Tax Administration

Noting that tax was paid on only 9% of properties in Ghana, and that an average of GH¢38.2 million was collected annually for property taxes in Ghana, he said over the last two years, Government has been working on providing a solution to this problem through digitisation.

Tax Filing Process

On the above, he said many people, including highly educated people, found the process of filing taxes complex.

“To make it easier and less cumbersome to file taxes, I challenged the GRA last year to come up with a simple to use mobile App to enable ordinary people file and pay taxes using their mobile phones. I am happy to announce that the GRA has completed the just completed that mobile App. The mobile tax filing application is available on the Ghana.Gov Mobile App (which is available on Google Playstore or Apple App Store). The tax filing Mobile App has been designed specifically to make the filing of taxes very simple. “Once you sign on, you will be asked to answer a number of simple questions. Once completed, you can hit the send button and your tax liability or refund will be calculated. You can then proceed to pay using MoMo, GhQR Code, Gh-Link, etc. You will receive an electronic receipt of your tax payment. You can also apply for and obtain an electronic tax clearance certificate.”

Business Registration Hurdle Removed

He said it used to take weeks and months to register a business resulting in frustration for businesses and loss of revenue for the government but now, the automation of the application for business operating permits has removed the complexities of the process.

“The process is currently, simple, transparent, and efficient. However, it is important to note that the IT system currently in operation at the RGD is very limited and does not cover all the services. A new open source system is therefore being put in place to address the existing challenges and cover all the RGD services. “All the services offered at the RGD will be automated under the new system for example there will be online registration of marriages at churches and district assemblies. I assure you the marriage ceremonies won’t be any less solemn or legal. We expect this new system to be operational within a year,” he assured.

BY Samuel Boadi