Govt must properly analyse tax exemptions --- Ali Nakyea
A TAX consultant, Dr Abdallah Ali Nakyea, has called on government to conduct a cost-benefit analysis of tax exemptions in the system.
He said the purpose of tax exemptions was to benefit the country in terms of job creation, technology transfers, export of products and services and so it was important that an assessment be made to ascertain the impact of exemptions.
At the second e-seminar series on “Coronavirus Pandemic, Tax Relief and Financial Reporting Implications,” organised by the University of Cape Coast (UCC) School of Business, Dr Nakyea explained that citizens had every right to question tax exemptions in Ghana, especially as they served as critical incentives for both domestic and foreign businesses.
“Citizens must also show interest and hold government to assess the various tax exemptions to be able to correct the wrongs of tax exemptions,” he said.
COVID-19 on tax
The Dean of the UCC Business School, Prof. John Gatsi, corroborated that globally, fiscal and monetary reliefs had been granted such as tax relief, reduction in interest rates, moratorium in the payment of interest on outstanding loans and the cancellation of any planned announcement and payment of dividends especially in the banking sector.
He explained that all those policy decisions and directives had implications for financial reporting, stating that the Coronavirus pandemic had broad implications for tax professionals, auditors and preparers of financial statements.
Prof. Gatsi said many companies had not been able to organise annual general meetings (AGMs) which also had implications for the approval of strategic plans and budgets among others.
“AGMs are crucial in the fiscal and strategic life cycle of companies. AGMs provide unique opportunities for shareholders to assess the performance of their companies and managements by evaluating the financial statements,” he said.
He called for creativity and engagement by professional bodies in accounting, taxation, auditing, regulatory institutions and government to deal with emerging challenges.
Prof. Gatsi said innovation should lead the way to ensure that the golden role assigned to shareholders through AGMs to promote good corporate governance and to make strategic decisions to foster the going concern of businesses was not truncated due to the coronavirus pandemic.
Financial reporting
The Head, Department of Accounting at UCC, Dr George Tackie, explained that financial reporting was an important communication between a company and its stakeholders to reflect record keeping in a particular financial year.
He said in the pandemic the requirement for proper bookkeeping should be enhanced because stakeholders would depend on the statements for various decision making.
“The requirement to prepare financial statement is rooted in the Companies Act and the International Financial Reporting Standards. Professionals such as accountants and auditors have a duty to maintain quality professional engagement as with or without the coronavirus pandemic the role played by credible financial statements will not change,” he cautioned.
Tax in a pandemic
For his part, Dr Isaac Nyame of Ikerm and Associates said it was necessary for the Ghana Revenue Authority (GRA) to continue to collect tax revenue during the pandemic because expenditure burden on the state did not reduce because of the pandemic.
He said during the pandemic tax officers were doing more of desk audit, which also meant after the pandemic, in-depth tax audits might be conducted on same taxpayers.
He advised taxpayers to enhance proper record keeping because after the pandemic intensive tax audits would take place to unearth tax payment abuses that might have taken place during the pandemic.
