The government of Ghana was Wednesday urged to adopt innovative tax models in formulating polices to engender rapid economic growth.

Professor Robert Darko Osei of the Institute of Statistical, Social and Economic Research (ISSER) of the University of Ghana, Legon, said this here at the launch of the first Tax-Benefit Micro-simulation model for Ghana.

He said the application of a simulation tax model would help policy makers and stakeholders get an understanding from an empirical point on how to make choices from different competing policy models.

“It is just not enough in today’s policy making arena to undertake policies without such models informing the decisions that we make.

Dr. Pia Rattenhuber of the United Nations University-World Institute for Development Economic Research (UNU-WIDER), observed that social protection was on the rise in the developing world and stressed the need for countries to increase their tax revenues.

She urged the training of model developers to come out with tax models that could be used to achieve balance between benefits from social protection and government revenues.

Tax-benefit micro-simulation models, which combine representative household-level data on incomes and expenditures and detailed coding of tax and benefit legislation, have proven to be an extremely useful tool for policy makers and researchers alike.

Ghana, like other developing countries, is now building up its social protection system and the financing of public spending will need to be increasingly based on domestic tax revenues.

The understanding of the system-wide impacts of different policy choices is critical.

Apart from Ghana, Ethiopia, Mozambique, Tanzania, and Zambia in Africa, Ecuador in South America and Vietnam in Asia are the first countries to apply the new micro-simulation model to address problems in their respective economies. Enditem

Source: Xinhua/