Adnan Adams Mohammed
A finance expert has advised government to leverage on financial institutions to encourage tax compliance among small businesses.
Prof. William Coffie believes that existing financial institutions, such as microfinance agencies, the Ghana Enterprise Agency (GEA), and the yet-to-be-established Women’s Bank, could serve as avenues to promote tax compliance among small businesses.
Although, he acknowledged the challenges of formalizing the informal sector, he emphasized the need for a strategic approach to integrating the informal sector into the tax system.
“With the proposal to establish the Women’s Development Bank, we can use this and other small medium, and micro firms to comply with tax payment”, Head of the Department of Accounting at the University of Ghana Business School (UGBS), Prof. William Coffie pointed when speaking at a post-budget discussion organised by Lima Partners, last week.
“We have a number of these microfinance institutions and agencies such as the GEA, MASLOC, and now the Women’s Bank. Why don’t we use these avenues to encourage micro and small businesses to comply with the reporting and record-keeping of their taxes? And say that if a small business or a micro firm could produce your account for three years and continuously show that you are paying your taxes, we are going to support you with a micro-credit as a way to support them.
“I believe that once these small business owners know that there is support for them just by good behaviour, they may comply,” he stated.
Meanwhile, the Minister for Finance, Dr Cassiel Ato Forson, last week gave his assurance to heads of commercial banks that, the government remains committed to responsible economic management and will not repeat the financial instability experienced in 2022.
He explained that lessons learnt from past economic challenges, are guiding the government to implement measures that promote stability and growth.
“Reckless financial decisions would not be tolerated, as the government aims to restore confidence in the banking sector and the broader economy”, Dr Forson noted while speaking to the Managing Directors of commercial banks operating in Ghana last week.
The Finance Minister stressed that a coordinated policy approach would be essential in ensuring sustainable growth and protecting the financial system from future crises.
He urged banks to collaborate closely with the government in implementing strategies that enhance liquidity, encourage investment, and strengthen economic resilience.
Dr Forson reiterated that the government’s priority is to create a stable economic environment that benefits both financial institutions and the general public.
“Policies would be carefully designed to support long-term stability, ensuring that Ghana’s financial sector remains strong and capable of driving national development.”
