News Guide Africa

Tag: Ghana taxes

  • High costs and taxes sparking “capital flight” …putting Ghana’s investment climate under threat

    High costs and taxes sparking “capital flight” …putting Ghana’s investment climate under threat

    Economic experts, business leaders, and lawmakers are raising urgent alarms over the future of Ghana’s investment landscape, warning that a combination of prohibitive capital requirements and a “world-leading” tax burden is driving investors away to neighboring competitors.

    The Ghana Investment Promotion Centre (GIPC) and the Minority Caucus in Parliament have both issued separate but reinforcing warnings last week, suggesting that the country’s status as a preferred investment destination in West Africa is rapidly eroding.

    High entry barriers stifling competition

    The GIPC has highlighted that Ghana’s high minimum capital requirements for foreign investors are increasingly becoming a bottleneck. While these requirements were originally designed to protect local businesses and ensure serious investment, the GIPC notes they are now hampering the country’s competitiveness.

    Industry analysts argue that as other African nations lower entry barriers to attract tech startups and manufacturing hubs, Ghana’s rigid financial thresholds are forcing potential investors to look toward markets like Côte d’Ivoire and Nigeria instead.

    “Highest burden in the world”

    Simultaneously, the Minority Caucus in Parliament has sounded a whistle on the mining sector, claiming that Ghana now imposes one of the highest tax burdens on mining firms globally.

    According to the Minority, the current fiscal regime, characterized by a mountain of levies and royalties, is actively triggering “capital flight.” They warn that major mining conglomerates are beginning to divert their exploration and expansion budgets to other jurisdictions where the tax environment is more predictable and less aggressive.

    “We are seeing a trend where capital that should be staying in Ghana to create jobs is flying out because the cost of doing business here has become unbearable,” a spokesperson for the caucus stated.

    Stability: The non-negotiable factor

    Amidst these fiscal concerns, business leaders are calling for a return to macroeconomic stability. At a recent investment forum, CEOs and entrepreneurs emphasized that while tax rates are a concern, “unpredictability” is the ultimate deal-breaker.

    The leadership of the business community stressed that for Ghana to attract the long-term capital needed for industrialization, the government must ensure a stable exchange rate and a consistent policy framework. They argued that investors can plan around high taxes, but they cannot plan around a volatile currency and frequent changes to the “rules of the game.”

    Call for reform

    The converging reports suggest a critical turning point for the Ghanaian economy. To maintain its competitive edge, the GIPC is advocating for a review of the investment laws, while business leaders are pushing for a more collaborative approach to fiscal policy.

    With the 2026 fiscal year underway, the government is under increasing pressure to balance its need for domestic revenue with the necessity of maintaining an environment that does not scare off the very capital it needs to grow.

     

     

  • Ghana’s tax system needs reform 

    Seth Terkper and Dr Mahmud Bawumia

     

    Adnan Adams Mohammed 

     

    A former Finance Minister is advocating for a holistic tax system reforms to reflect transparency, efficiency, and the long-term financial health of Ghana.

     

    The former minister believes that, an improved tax collection mechanism; such as, automation and integration of income tax and VAT files, could result in an increased in revenue.

     

    Speaking in an interview after a presentation on Ghana’s International Monetary Fund in Accra last week, he questioned the delay in implementing the tax system digitisation, stressing the need for an efficient domestic Information Technology (IT) system for the Ghana Revenue Authority (GRA).

     

    Seth Terkper, further revealed the complexities of Ghana’s tax system and proposed reforms for a more efficient and transparent structure. According to him, Ghana has four tax regimes namely: Income Tax, Excise Duty, Petroleum Tax and Import Duties.

     

    He emphasised the importance of focusing on the four core taxes – income tax include: personal income tax, corporate income tax, and VAT, adding these are the pillars of the country’s revenue regime due to their broad tax base.

     

    Petroleum taxes are the levies put on products, adding that excise duties are punitive and usually put on products such alcohol and cigarettes, among others.

     

    On the concerns of increasing number of levies, he asserted that they contribute less than 6% to overall revenue and distort the primary tax system.

     

    He thereby called for transparency in the introduction of new taxes and urged a return to the core pillars for the tax regime indicating that, certain levies are distorting the tax regime and encouraging tax evasion and avoidance.

     

    Mr Terkper recommended clearing unnecessary levies and focusing on the fundamental tax pillars for sustainable revenue generation

  • Businesses overwhelmed with taxes.. call out on gov’t to save jobs and investments

    Adnan Adams Mohammed

     

    Some Business owners in the country have since been on government to reconsider numerous taxes they pay right from source of their raw materials through import duties to production, packaging and selling their finished goods.

     

    The business captains claim government is deliberately targeting them as the soft-spot for its revenue mobilisation because they are formalised.

    Businesses owners have intensified their calls on government to either review or scrap some of the taxes.

     

    After several attempts to get the government’s attention to scrap the COVID Health Recovery Levy from the list of taxes businesses pay, President Nana Akufo-Addo recently pleaded with Ghanaians to keep paying the Covid-19 levy despite the pandemic was declared over.

     

    “The COVID Health Recovery Levy that was introduced to help fill some of the expenditure holes might not be the most popular tax, but I entreat all of you to bear with us”, the president pleaded.

     

    However, the Ghana Union of Traders Association (GUTA) has said it is not opposed to government’s increasing its revenue rather they want the Covid-19 levy expunged.

     

    The President of GUTA, Dr Joseph Obeng, explained that the association is not opposed to taxes including the e-levy, noting: “The e-levy, as it is structured now, is OK, and will help expand the tax net but the Covid levy is what needs to be taken out of the table to help lessen the burden of businesses.”

     

    The GUTA president noted the Covid levy “is deemed as a nuisance tax now that the Covid era is over.”

     

    The government imposed the covid levy on the supply of goods and services and imports to raise revenue to support Covid-19 expenditures and to provide for related matters.

     

    Within eight months of coming into implementation, the levy accrued GH¢773.93 million, according to fiscal data released by the Ministry of Finance on 22 April 2022.It was 12.7 percent lower than the budget target of GH¢889.07 million. In 2021, expenditures on Covid-19 and related issues, totalled more than GH¢2.8 billion.

     

    Additionally, the Association of Ghana Industries has called on government to reconsider its current calculation of Value Added Tax (VAT) on indigenous companies whose annual revenue exceed GHS 500,000 per annum to reduce the economic burden on local industries.

     

    According to them, per the current calculations of 15 percent VAT and the summation of the COVID levy, GETFUND and NHIS levy amounting to 6% coupled with other cost of production were negatively impacting the growth of local industries.

     

    The Greater Accra Chairman of AGI, Tsonam Akpeloo impressed on government to relook the development.

     

    “The way the VAT is being calculated currently means that we are being charged double or we are paying VAT on VAT. This essentially means that government adds the levies i.e. NHIS, the Covid and GETFund which is totaling 6 percent to cost of the products before applying the VAT and the other levies again,” he said.

     

    “In effect, one business, one transaction we have to pay double tax and this calculation is not helpful. Already Industries are struggling, there is no point in getting them to pay tax in this manner so we want government to reconsider its computation and reverse it to the time before 2017,” he appealed.

     

    In November 2022, Government announced its decision to increase the Value Added Tax (VAT) by 2.5 percent.

     

    This moved the tax policy from its previous percentage of 12.5% to 15%.

     

     

    Adding his voice to the tax burden on businesses, the Chief Executive of AGI, Seth Twum Akwaboah, has called for a reduction in duties paid on raw materials used in printing and packaging in the manufacturing sector.

     

    According to him, this is necessary to cushion local producers and contribute to exports and development.

     

    “When you import raw materials to print, you pay duty on it but when you import the finished product, you do not pay duty on it and it makes the local printing more expensive than importation. So we think that this policy is not helping local producers and if we want to create jobs and grow the economy and reduce our dependency on imports and protect the local currency, these are some of the things we have to look at,” he said on the sidelines of the opening of Propak Exhibition and trade conference in Accra, last week.

     

    Mr Twum Akwaboah called on government to review some outdated trade policies to give a boost to local producers within the printing, packaging and labeling space.

     

    The Association explains that with the growing presence of industrial revolution in the country, local producers have built their competences to meet the demand of clients and society.

     

    “The Florence Convention which was a convention signed in the 1850s because at the time we didn’t have sophisticated printing presses in Ghana. So to encourage one to bring in the learning materials, the duties were taken off: at that time it made a lot of sense but unfortunately this law has stayed with us up till today. While we have moved on in terms of capacity to print,” he noted.

    “We also have some sophisticated printing firms in Ghana now and duty of imports of raw materials continues to persist so we believe that kind of policies is not helping local producers and it should be looked at,” he added.

     

    Consequently, some investors within Ghana’s automotive industry are asking government to explore various options in addressing the high taxes in the country, impacting on their business.

     

    This, they say is affecting their cost of operations in the importation of components for assembling vehicles in the country.

     

    According to Chief Operations Officer of Rana Motors, Kassem Odaymat, the prospects for the automotive industry are positive, but more work needs to be done to attract investors.

     

    “The automotive business as a whole, any tax introduces affects us in a way because our business model is not just assembling of cars but we do other things like tyres, car batteries and other components”, he said in an interview last week.

     

    “I won’t say there are too many gaps but we have some that need to be relooked at. The economy now is not favourable, but we hope things will be fine”, he said.

     

    Mr Odaymat, however, maintained that the automotive industry in Ghana has a positive outlook and as a result, it should be attractive enough to bring in more investors.

     

    Government in 2019 said it will offer tax breaks of up to 10 years to automakers that set up local manufacturing plants, as it seeks to attract international companies such as Volkswagen AG and Nissan Motor and co.

     

    Ghana’s move at the time was to lure carmakers from some African countries which had attracted seven manufacturers including Renault, Nissan and Toyota with tax incentives.

     

  • Economy to experience prolong recession as new tax policies take effect

    Economy to experience prolong recession as new tax policies take effect

    Adnan Adams Mohammed

     

    Ghana’s economy is heading into recession if the new tax policies passed by Parliament have been assented by the President are implemented wholesomely, an economist has warned.

     

    The economic professor, Charles Ackah, believes some of the taxes introduced will end up frustrating businesses and end up frustrating government’s efforts at economic recovery and prolong recession. He is thereby calling on the government to devise strategies to prevent crowding out of the private sector.

     

    President Akuffo-Addo yesterday assented to the new tax laws passed by Parliament recently, thus, the Excise Duty Amendment Bill 2022, the Growth and Sustainability Levy Bill, 2022, the Ghana Revenue Authority Bill 2022, and the Income Tax Amendment Bill 2022. Although government has justified that these new taxes are needed to turn the economy around as they are part of efforts to meet the IMF’s criteria to qualify for a bailout, many stakeholders have argued that expanding the tax net without taking cognisance of working to improve its base will affect negatively most businesses in the country.

     

    “Government must exercise great care in times like this to shape its fiscal policy to be consistent. This will strengthen the economy. I think some of the taxes introduced will end up frustrating businesses and end up frustrating government’s efforts at economic recovery and prolong recession,” Prof. Ackah advised.

     

    “We are not against tax revenue. People are calling for a cut in expenditure and again, I totally disagree because our expenditures are not that high. Rather, there’s wastage and what we must be calling for is efficiency in government expenditure”, he added.

     

    Consequently, the Country Managing Partner of Deloitte Ghana has advised government to be careful about what he describes as creating tax fatigue in the country.

     

    “I think we need to expand the tax base and not just increase the rate. When that is done it will create tax fatigue”, Daniel KwadwoOwusu argued. “We need to expand our tax base by increasing formalisation of our economy through digitalisation.”

     

    Speaking at the launch of the 7th edition of the Ghana CEO Network Summit, MrOwusu entreated government to include various economic activities to rake in more revenue.

     

    Indicating that the current economic and global challenges should push government to find more innovative solutions to addressing economic issues.

     

    “This will help boost internal revenue generation and reduce reliance on external borrowing and funding support”, he added.

     

    He further indicated that the over-reliance on external funding support will be forestalled if successive governments invest borrowed funds from external creditors into various productive sectors of the economy.

     

    He contends that government should desist from channelling borrowed funds to just expenditure, a move he believes is key to boosting internal revenue generation.

     

    “Ensure that borrowed funds are invested in projects that will expand the productive capacity of our economy. This will also boost revenue generation and reduce reliance on external support”.

     

    Presently, Ghana’s tax to Gross Domestic Product hovers around 14%, lower than the sub-Saharan African average of 19%.

     

    Though the economy has expanded over the years, analysts believe there are numerous loopholes within the tax system, whilst government has given too many tax holidays to some foreign firms.

     

    Also, the Association of Ghana Industries (AGI) has said the three revenie bills recently passed by parliament will strangle industrial growth, thus, slow down productivity, which would, in turn, cut down the revenue the government can rake in through taxes.

     

    In a statement signed by its Chief Executive Officer, Mr Seth TwumAkwaboah, the AGI said the three bills will “pose very dire consequences for Industry.”

     

    “We denounce the lack of stakeholder consultation on such fiscal policies, which have negative impact on businesses”, the AGI noted.

     

    Although the association made input to the bills, but it shared that, it is obvious their submissions did not receive the consideration as expected.

     

    Contrary to government’s ambitious revenue projection which largely hinges on the performance of Industry, captains of businesses foresee a contraction in manufacturing and other related business activities.

     

    They believe businesses may have no option but to cut down on expenditure and production levels to stay within budget”, the association warned.

     

    “With the foregoing, government risks missing its revenue target if industry has to contend with these new taxes.

     

    “While we reckon that the government needs revenue, fiscal prudence is crucial”, the association added in the statement.

     

    “We appreciate the urgent need of the IMF measures, but this should not be at the expense of growth in our industrial sector.”

     

    “We call on the government to engage AGI on measures to incentivise our local industries to forestall the negative consequences of these policies”.

     

    The group of business owners related that, they are ready to dialogue with Government for a better way out to save jobs while ensuring business growth which have direct impact on GDP growth, in other words, economic expansion of the country.

     

    “To this end, we welcome the opportunity to dialogue with Government on how to save jobs and the strategic options to explore in cushioning our local industries.”

     

    Also, to register its dismay against the unanimous approval of the tax bills into law by Parliamentarians is the Transport Forum Ghana. It bemoaned the posture of the current crop of young parliamentarians.

     

    Vice-President of the Forum, Mr Eric AmoahAmponsah, in an interview last week, said “we had a lot of hope. We, as youth; we, had a lot of anticipation that they would push our cause.

     

    “But take it from me, the majority of them have gone and [are] pushing agendas based on party lines, not the community that voted for them. The ideas they push, the thoughts they have, it has become based on party lines.”

     

    He indicated that there were no consultations done by these young parliamentarians with the constituents concerning the bills to find out how it would affect their lives but rather, they put their party lines first and gave their approval.

     

    “These new taxes that have been passed, how many parliamentarians went back to their constituencies to check [with them that] ‘This is what government is proposing. What do you think?’ to consult traders.

     

    Parliament, fortnight ago, after fierce resistance by Minority MPs who narrowly lost the vote to approve the bills by 136 to 137, passed the Excise Duty Amendment Bill 2022, the Growth and Sustainability Levy Bill, 2022, the Ghana Revenue Authority Bill 2022, and the Income Tax Amendment Bill 2022 by Parliament.

     

    According to the Finance Ministry, the three bills are expected to individually rake in the following;

     

    Income Tax Amendment Bill 2022 will bring in GH¢1.2 billion annually, Excise Duty Amendment Bill 2022 GH¢400 million annually and Growth and Sustainability Amendment Bill 2022 GH¢2.2 billion annually.

  • Gov’t told to be wary of tax fatigue

    Adnan Adams Mohammed

     

    Last week Parliament of Ghana unanimously approved three amended tax laws which have reviewed upwards some tax items in the Income tax law, Excuse duties law and the Growth and Sustainability levy which replaces the former National Fiscal Stabilization levy.

     

    The approval has already received strong opposition and criticism from businesses, tax experts and economists. Newest to add its voice is the Country Managing Partner of Deloitte Ghana advising government to be careful about what he describes as creating tax fatigue in the country.

     

    He expatiated that, expanding the tax net without taking cognisance of working to improve its base will affect negatively most businesses in the country.

     

    “I think we need to expand the tax base and not just increase the rate. When that is done it will create tax fatigue”, Daniel Kwadwo Owusu argued. “We need to expand our tax base by increasing formalisation of our economy through digitalisation.”

     

    Speaking at the launch of the 7th edition of the Ghana CEO Network Summit, Mr Owusu entreated government to include various economic activities to rake in more revenue.

     

    Indicating that the current economic and global challenges should push government to find more innovative solutions to addressing economic issues.

     

    “This will help boost internal revenue generation and reduce reliance on external borrowing and funding support”, he added.

     

    He further indicated that the over-reliance on external funding support will be forestalled if successive governments invest borrowed funds from external creditors into various productive sectors of the economy.

     

    He contends that government should desist from channelling borrowed funds to just expenditure, a move he believes is key to boosting internal revenue generation.

     

    “Ensure that borrowed funds are invested in projects that will expand the productive capacity of our economy. This will also boost revenue generation and reduce reliance on external support”.

     

    Presently, Ghana’s tax to Gross Domestic Product hovers around 14%, lower than the sub-Saharan African average of 19%.

     

    Though the economy has expanded over the years, analysts believe there are numerous loopholes within the tax system, whilst government has given too many tax holidays to some foreign firms.

     

    Consequently, the Association of Ghana Industries (AGI) has said the three revenue bills recently passed by parliament will strangle industrial growth, thus, slow down productivity, which would, in turn, cut down the revenue the government can rake in through taxes.

     

    In a statement signed by its Chief Executive Officer, Mr Seth Twum Akwaboah, the AGI said the three bills will “pose very dire consequences for Industry.”

     

    “We denounce the lack of stakeholder consultation on such fiscal policies, which have negative impact on businesses”, the AGI noted.

     

    Although the association made input to the bills, but it shared that, it is obvious their submissions did not receive the consideration as expected.

     

    Contrary to government’s ambitious revenue projection which largely hinges on the performance of Industry, captains of businesses foresee a contraction in manufacturing and other related business activities.

     

    They believe businesses may have no option but to cut down on expenditure and production levels to stay within budget”, the association warned.

     

    “With the foregoing, government risks missing its revenue target if industry has to contend with these new taxes.

     

    “While we reckon that the government needs revenue, fiscal prudence is crucial”, the association added in the statement.

     

    “We appreciate the urgent need of the IMF measures, but this should not be at the expense of growth in our industrial sector.”

     

    “We call on the government to engage AGI on measures to incentivise our local industries to forestall the negative consequences of these policies”.

     

    The group of business owners related that, they are ready to dialogue with Government for a better way out to save jobs while ensuring business growth which have direct impact on GDP growth, in other words, economic expansion of the country.

     

    “To this end, we welcome the opportunity to dialogue with Government on how to save jobs and the strategic options to explore in cushioning our local industries.”

     

    Also, to register its dismay against the unanimous approval of the tax bills into law by Parliamentarians is the Transport Forum Ghana. It bemoaned the posture of the current crop of young parliamentarians.

     

    Vice-President of the Forum, Mr Eric Amoah Amponsah, in an interview last week, said “we had a lot of hope. We, as youth; we, had a lot of anticipation that they would push our cause.

     

    “But take it from me, the majority of them have gone and [are] pushing agendas based on party lines, not the community that voted for them. The ideas they push, the thoughts they have, it has become based on party lines.”

     

    He indicated that there were no consultations done by these young parliamentarians with the constituents concerning the bills to find out how it would affect their lives but rather, they put their party lines first and gave their approval.

     

    “These new taxes that have been passed, how many parliamentarians went back to their constituencies to check [with them that] ‘This is what government is proposing. What do you think?’ to consult traders.

     

    Parliament, fortnight ago, after fierce resistance by Minority MPs who narrowly lost the vote to approve the bills by 136 to 137, passed the Excise Duty Amendment Bill 2022, the Growth and Sustainability Levy Bill, 2022, the Ghana Revenue Authority Bill 2022, and the Income Tax Amendment Bill 2022 by Parliament.

     

    According to the Finance Ministry, the three bills are expected to individually rake in the following;

     

    Income Tax Amendment Bill 2022 will bring in GH¢1.2 billion annually, Excise Duty Amendment Bill 2022 GH¢400 million annually and Growth and Sustainability Amendment Bill 2022 GH¢2.2 billion annually.

     

  • Part 2: Taxes and Ghana’s debt economy : experts view on the new tax bills

    Part 2: Taxes and Ghana’s debt economy : experts view on the new tax bills

    Adnan Adams Mohammed

     

    As the debate on the proposed new tax bills rages on, continuing from part one of this article, the opposition to the new tax bills is by day getting stiffer.

     

    The Ghana Upstream Petroleum Chamber has also warned that, the proposed Growth and Sustainability Levy by government could trigger litigation through the international court as it breaches provisions in the petroleum agreements.

     

    According to the Chamber, it is worried that the government is bent on going ahead to breach these provisions to raise money from what it describes as “creeping taxation”.

     

    In a statement issued by the Ghana Upstream Petroleum Chamber, last week, asked government to reconsider the introduction of the growth and sustainability levy, especially at a time the country is struggling to attract new investments in oil and gas exploration.

     

    The Chamber added that “the industry considers this levy as the latest in a series of crippling taxation that is affecting the economic balance of petroleum agreements.”

     

    Some of these taxes include, “ the COVID-19 Recovery Levy, Ghana Education Trust Fund Levy, National Insurance Levy, the 1% Local Content Fund Levy and several others,” the Chamber disclosed.

     

    It added that “this new tax disregards the importance of the preservation of contract sanctity to the promotion of new investment.”

     

    The Chamber was also worried that “unpredictability of the fiscal terms of our petroleum agreements will discourage new oil and gas investment at a time when financial institutions are curtailing investment in fossil fuels.”

     

     

    The better way out

     

    In considering some alternative decisions and policies that government should be focusing on instead of the cheap way of introducing and reviewing tax policies frequently, hurting the already overburdened tax-compliant individuals and companies, the experts provided a better way out.

     

    Doubling effort on digitisation of the economy

     

    Professor Ebo Turkson urged government to ramp up its digitalization drive to put all the tax and invoice requirement on a single government platform to ease business at the ports.

     

    He emphasised that, “For instance, the number of government agencies for instance at the ports that are collecting revenue for government, can we reduce the number of them and still getting more of these revenue. Because you see, the more you put in place some of these institutions and these taxes, the easier it is for people to evade those taxes for convenience. So let the process be so straightforward so that tax payers will comply easily so that it doesn’t waste their time,” he said.

     

    Reversing tax incentives and tackling IFFs

     

    In his suggestion, Dr Ali Nakyea wants government to reverse some tax incentives and block illicit flows of cash from the public purse.

     

    “You are granting incentives to certain sectors that they shouldn’t pay tax, is it time to ask them to come and help you contribute? If it is the 25 they cannot pay, can you bring in 5%, 10%? That is one area.

     

    “The second one is trying to look at what we refer to as illicit financial flows that is complete non-disclosure. If you take the Ghana Integrity Initiative and CHRAJ reports, it will tell you that Ghana is losing US$3 billion dollars annually from corruption. Is that not exactly the amount we’re looking from IMF.

     

    “If you take ACEP report, it tells you we’re losing US$2 billion from illegal mining. If you add the two, we’re at US$5 billion. We’ve not come to under invoicing and other things at the port. So do you need IMF/ we’re talking about $5 billion a year now, and you’re going to get US$1 billion a year from IMF,” he said.

     

    Dr. Ali Nakyea called on the government to close the tax gap and rope in much of the informal sector and suggested that, the second schedule to the Income Tax Act 2015 (Act 896) be implemented.

     

    “Because it brings up the idea that why can’t we allow the informal sector to give say the 2% 3% of their turnover like the growth and stablization levy is saying and that is your total tax for VAT and income tax at least you are also contributing something then we could have opened the net, we would have widened the net,” he said.

     

    Cutting government expenditure

     

    Additionally, Dr. Ali Nakyea suggested that,  instead of increasing taxes, the government should have instead explored avenues for drastically reducing their expenditure.

     

    He said the government could have started with postponing some non-urgent projects to provide the much needed fiscal space for government maneuvering.

     

    “If your income is to meet expenditure, are there no expenditures that may be postponed or suspended to give you enough room to maneuver when things are [hard] – you can’t continue. Indeed, most of the calls that are being made are not on cancellation entirely of some of the projects, people are even asking, can you suspend some of them that are not so immediate and pressing and when things normalise we come back to it. I don’t think that is asking too much,” he said.

     

    He added that the government could have also explored ways to close the country’s widening tax gap instead of increasing taxes.

     

    “For me it’s that are we efficient and effective in the collection of the existing taxes? Because we studies by Opoku and Tanaka in 2020 showing us what we call the tax gap, the difference between the actual taxes we collect and the potential we can collect. How have we closed that gap?

     

    “Because the more taxes we introduce, the wider the gap will be if compliance is that low or non-existent. So I believe if we’re able to mop up excessively what exists and we’re not able to achieve then we can start thinking about is it that we don’t have enough? We have more than enough taxes. The …tax we have are competitive in the sub-region, and so why are you increasing it?” he said.

     

    Tax education

     

    Prof Turkson Ebo proposed enough public tax education to promote a tax compliant attitude in Ghanaians.

     

    According to him, promoting a tax compliant attitude would support the government’s tax revenue mobilisation agenda rather than the introduction of new tax measures. He explained that increasing taxes without increasing tax compliance amongst Ghanaians would be counterproductive and potentially injurious to the growth of the private sector.

     

    “One way the government could encourage Ghanaians to be tax-compliant was to show the citizenry that the government was making good use of their taxes.

     

    “We need to ensure that there is enough public tax education and also we should show the public sector, the government machinery must show the average Ghanaian that we’re making good use of your money to support the public sector to create jobs for your kids or the young men and women of this country to get into jobs.

     

    “When you do that and people see that the revenue that you get from the taxes are plowed back into the economy to help them, people will be willing to pay taxes. Businesses will be willing to pay more taxes, if for instance you discuss with them and increase their after profit tax by a little bit,” he said.