Honour your tax obligations

It sounds like a simple equation — announce more money for a public policy initiative and say you will pay for it with an increase in taxes.

The payment of taxes in Ghana and other parts of the world has been a political hot potato for decades.

Our government has begun taking action to combat tax avoidance by multinational companies and other citizens.

Yes, without money, the government cannot improve the infrastructure, and, yet, without that infrastructure, people do not want to pay taxes.

Indeed, governments need to collect money from their citizens to pay for health, education, transport, public salaries and security all of which, even at the basic level, allow the economy to function properly.

We must all know that when taxpayers fail to pay their taxes as stipulated by law, development is hindered.

The government has often complained that it has to cope with insufficient resources and is faced with the daunting tast of extracting money from a population that, generally speaking, is extremely reluctant to pay up.

For countries like Ghana that have newly discovered oil, it could be difficult getting the taxes to roll in from individuals and businesses.

But many of the problems concerning insufficient taxes in the country are due to the fact that much of our economy is informal, and it is difficult to tax people in the informal sector.

Low tax collection in the country has led to low revenue, leaving the government with insufficient funds for development.

This is because provisional fiscal data for the first seven months of the year show that total revenue and grants amounted to GH¢20.8 billion, which is 10.3 per cent of GDP, compared with a target of GH¢24.0 billion or 11.3 per cent of GDP.

Again, total expenditures and arrears clearance stood at GH¢28.8 billion, which is 14.3 per cent of GDP, against a target of GH¢32.3 billion, which is 16.0 per cent of GDP.

Revenue performance has been undermined by low import levels, a slower pace of implementing specific tax measures, revision of tax assessments and a sluggish non-oil real sector.

It is the view of the Daily Graphic that the government should spell out efforts aimed at building integrity into the tax collection system.

In our view, the government must begin to review some of the tax exemptions and rebates granted to some organisations and assess their importance in the wake of dwindling tax revenues.

After all, the essence of taxes is to enable the citizenry to contribute their quota to national development.

We, therefore, suggest to the government to embark on an intensive and sustainable tax education drive to ensure that the citizenry is well educated on the complex tax issues and earnings that attract taxes.

It is our expectation that when citizens become aware of their responsibilities to the state, they will be able to honour their obligations, including tax.