Tax structure deserves a second look
Before the end of next month, the 2024 budget and government economic policy will be laid before Parliament.
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Ahead of the presentation, many business associations, chambers, individuals and experts in different areas are beginning to make their position known in response to a call by the Finance Ministry for inputs into the final document.
Ahead of that, the Food and Beverage Association of Ghana (FABAG) has appealed to the government to make the 2024 budget business friendly by doing away with what they described as nuisance taxes in the tax structure.
The association is convinced that such an initiative would enable the private sector, described as the engine of growth, to thrive and perform sustainably.
The business community has raised serious concerns about the number of taxes imposed on goods and services produced in the country. Another area is at the ports’. Importers have also complained about the numerous charges and levies which make their goods expensive, particularly raw materials meant for local production.
Analysts have also held the view that much as the government it is in dire need of revenue, it is wrong to, as they put it, impose taxes indiscriminately because of its negative impact on the economy as a whole.
The Graphic Business is aware of the fact that the government has determined in the last couple of years to increase its domestic revenue generation, particularly through taxes and levies to be able to close the revenue gap occasioned by its inability to access the international capital market.
While we axknowledge the need for an ehance government revenue on account of the current economic challenges, we also are of the view that all efforts must be made to eliminate double taxation in the system.
We know from our search that there are a lot of charges at the ports which make it tough for importers who bring in either finished goods or raw materials to sell or produce in the country because the taxes are charged indiscriminately.
The paper believes that the cries of the business community are genuine and deserve a second look, not in a way to deprive the state of what is due it, but to harmonise the tax system in a manner that will ensure promotion and sustainability of local businesses, particularly those in the manufacturing industry.
Again, it is our hope that the government will work with the revenue collection agencies to find a more pragmatic way of widening the tax net.
This issue about widening the tax net has been raging for far too long, with no concrete effort to actualise it in a manner that does not overburden the ones already captured in the tax net.
Over the years, we have witnessed instances where taxes are raised from the same few known corporate taxe payers, a development that only makes cost of doing business in the country more expensive for investors and locals alike.
It is imperative to note that the more taxes are raised and slapped on every activity in a manner as it is now, more eligible taxpayers are forced against their wish in many instances to avoid or evade its payment. This is not healthy for the economy, whichever way one looks at the issue.
The country is at the crossroads and it makes sense to ensure that the domestic revenue gap is closed to enable the government to continue with its development projects.
The Graphic Business expects businesses to operate and expand to be able to employ the mass of the people without jobs. If businesses boom, they will also make more profits and the government can easily tax to increase its revenue from within.
This 2024 budget will definitely be unique because of the International Monetary Fund (IMF) programme the country has subjected itself to.
There are conditions, one of which is to increase domestic revenue. But we believe that this can be done in a more coordinated manner to save the business community from collapse and spur growth, particularly at the micro level.