The tax payment troubles
Recently, President Nana Addo Dankwa Akufo-Addo, at this year’s Conference of the Ghana Bar Association in Bolgatanga, expressed regret that many Ghanaians have not made the payment of taxes regular and predictably part of their lives since the coming into force of the 4th Republican dispensation.
Embarrassingly, a recent disclosure by the Ghana Revenue Authority (GRA) to the effect that some 60,000 professionals working in the country consistently evade taxes is also troubling.
These, according to the Authority, include highly revered professionals such as lawyers, accountants, doctors, engineers, surveyors and architects.
Throughout the world, many people do not like paying taxes. What at all account for this and what must we do to encourage our professionals and other groupings, be it in the formal or informal sectors, to pay their taxes before the GRA descends on them to ensure compliance.
Ordinarily, it will be mind boggling why such top-level members of our society are not honouring their tax obligations as a civic duty for the progress of the nation.
Professionals, such as lawyers, accountants, doctors, engineers, surveyors and architects among others are well informed citizens who must know the benefits of paying taxes to the state. It must therefore be troubling that such a thing is not happening or is it that their expectations are not being met by way of how the tax revenue are being utilised.
Source of revenue
Truth be told, one wonders what then happens to the other section of society that is less informed about the importance of paying tax and how it impacts on the progress of any nation. As a means of raising revenue to meet budgetary demands, governments impose charges on their citizens and businesses to be able to finance public projects.
In addition to revenue from the country’s exports, taxes have become major sources of revenue for the provision of social projects such as health, education, governance, infrastructure development, transport, security, scientific research and environmental protection.
In short, development is almost impossible without the payment of taxes from the citizenry and across the globe, including Ghana. Every nation depends on taxes for development.
In Ghana, citizens among others are enjoined to pay taxes on gains and profits from any employment, including any allowances and benefits paid in cash or given in kind to or on behalf of an employee. This, many of us fail to do.
Citizens are also expected to pay taxes on gains or profits from trade, business, profession, or vocation, from realisation of assets and liabilities, gifts, dividends, among other incomes.
The regret is that, despite the clear and comprehensive nature of our tax laws, only a handful of citizens who receive any form of taxable income really pay taxes in our country.
It is estimated that only 1.2 million out of six million economically active people in Ghana pay taxes. Even out of the figure of those who pay taxes, about one million are in the formal sector, where taxes can be deducted at source from their income.
This is against the backdrop that provisional results from the 2021 Population and Housing Census indicates that around 80 per cent of the Ghanaian labour force is employed within the private informal sector.
In fact, the developed countries are partly at that high level of development because of their strict adherence to payment of taxes to fund their own infrastructural development, whereas we constantly struggle to do same, here.
Domestic revenue mobilisation
We must thus, significantly enhance our domestic revenue mobilisation capability immediately to realise our development potential, create opportunities for our vibrant and dynamic youth, and deliver improved livelihoods for the citizenry.
But this does not come easy. There must be effective, sustained education to sensitise citizens to the need to pay taxes. Our educational system must also strongly position payment of taxes in the curricula to make our children attuned to the practice.
The government must also vigorously continue with its programmes such as the issuance of Tax Identification Numbers (TINs), GhanaCard, Digital Property and Address System, and cashless system.
We must also work to do away with the perceived inherent challenges with the country’s tax system, as about 68 per cent think it is very difficult and cumbersome, according to the Afrobarometer Report.
Integrity of GRA officials
In the eyes of many Ghanaians, the integrity of some GRA officials is rather low. Many people perceive some tax officials to be involved in corruption. Thus, to many ordinary Ghanaians, rightly or wrongly, the country’s tax administration stinks with graft.
Finally, the laws on tax evasion must be applied to the letter to make tax evasion a disincentive for every citizen. But more importantly, revenues derived from taxes must be spent on the wellbeing of the people.
After all, the country can only be built by its citizens, and we must ensure people pay taxes to the state to make development indisputable.