Show tax certificate to receive public service: Vice-President announces measure from next year
From next year, anybody requesting any form of public service will have to present the relevant tax clearance certificate to receive the service.
This is due to the completion of the automation of the tax clearance certification process by the Ghana Revenue Authority (GRA) for a takeoff in October this year.
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The Vice-President, Dr Mahamudu Bawumia, who announced this, said the automation of the process would enhance compliance and domestic revenue mobilisation.
Addressing the 10th Annual International Tax Conference of the Chartered Institute of Taxation, Ghana (CITG) in Accra yesterday[August 24, 2022], Dr Bawumia said: “We are not just going to say comply voluntarily if you want public services; you will have to file your taxes and get the clearance certificate to show so that we can have a major impact of tax to GDP”.
The two-day conference, dubbed: “Improving domestic tax revenue mobilisation: A consultative and inclusive approach”, attracted participants from across the continent.
It will focus on topics such as tax compliance, prosecution, dispute resolution, digitalisation and taxation.
Digitalisation
Dr Bawumia said the Ghana Revenue Authority (GRA) had taken up the challenge to demystify its tax compliance process with educational campaigns and improved transparency in its tax administration by giving the taxpayer a self-service portal.
That, he said, would enable any taxpayer to view their balances on the ledger on the relevant public platform, pointing out that as of July 2022, some 847,597 tax returns had been filed online.
The process works by logging into the taxpayer portal with the individual’s Ghana Card number and applying for the tax clearance certificate online.
The system will do the background check to ensure that there are no outstanding tax returns and payments, and then issue to successful applicants an electronic tax clearance certificate on the mobile phone.
Dr Bawumia gave an assurance that government was laying the groundwork and building a machinery to address some of the challenges of domestic revenue mobilisation, stressing that those efforts included the introduction of the national identity card (Ghana Card), the digital address system, and the mobile money interoperability which ensured financial inclusion.
Manual system
The Vice-President said the process of obtaining a tax clearance certificate manually, with the issuance of a hand-written certificate over the years, had been characterised by issuance delays, difficulty in verifying genuine tax clearance certificates, among others.
The automation of repetitive tax, the Vice-President explained, was intended to reduce the discretionary use of power and its attendant corruption or alleged corruption by public officials, while promoting compliance and a friendly taxpaying environment.
Taxation
A Senior Lecturer at the University of Ghana Law School, Dr Abdallah Ali-Nakyea, stressed the significance of taxation, saying it was the bedrock of all countries which directed the business climate.
Dr Ali-Nakyea, quoting from several sources to buttress his point, said as of 2019, “we had tax GDP ratio below 15 per cent, which is far below the average of 20 per cent that most African countries have”.
“In 2020, for instance, in Ghana we had 12 to 13 per cent, and in 2021 we rose to 13.5 per cent, but still we are not within what a middle- income country should be doing.
“Our African peers, Rwanda, has 15 per cent; Cote d’Ivoire 18 per cent, Kenya 18 per cent, South Africa 28 per cent and Seychelles has 32 per cent,” he pointed out, and said “what it tells us is that Ghana is still below the 20 per cent GDP ratio required for ECOWAS countries in our effort to try to have a common currency, the Eco.”
Dr Ali-Nakyea said the figures showed “that our problem is not our tax rates because we compare favourably within the region and in other countries”.
“Our problem has to do with the tax loss we are incurring because those who are required to pay at these rates, we cannot find them,” he said.
The Chairman of the CITG Council, Emmanuel Obeng Asiedu, called for collaboration among the respective institutions to improve tax collection to increase revenue.