GRA implements measures to rope informal sector into tax net

The Ghana Revenue Authority (GRA) is implementing measures to ensure that players in the informal sector duly pay taxes.

As part of the measures, the GRA said it had moved from the tax stamp system which was based on the nature of business in the informal sector to a modified taxation system, which considers a threshold for businesses.

An Assistant Commissioner of the GRA, Dr Alex Kombat, said due to the inability of businesses in the informal sector to keep proper records, it was difficult for the GRA to tax them.

“Nonetheless, the authority will not relent in its efforts to ensure that everyone contributes to the tax basket,” he said.

Dr Kombat was speaking at a workshop organised by civil society organisation, SEND Ghana, to solicit inputs of certain interest groups into the 2025 budget statement.

Event

In attendance were various interest groups such as the physically challenged, LEAP beneficiaries, educationists, opinion leaders, religious groups among others who made input into the 2025 budget preparation.

After the event, SEND Ghana would collate the views of all stakeholders and present them to the Ministry of Finance to be considered as its contribution to the 2025 budget preparation.

Modified taxation

The asst. commissioner further said the old tax stamp system was based on an understanding that the income of businesses in the informal sector could not be ascertained, and, therefore, businesses were taxed based on their categorisation as big, medium or small.

“We have moved to the modified taxation where we look at thresholds of the informal sector and give them the tax to pay.

“Those who have up to GH¢20,000 are supposed to pay GH¢45 every quarter, those between GH¢15,000 to GH¢20,000 are supposed to pay GH¢35, while those below will pay GH¢15,” he added.

The comments by Dr Kombat follow numerous concerns by businesses and workers in the formal sector of always shouldering the tax burden, a situation they said was negatively affecting their finances and making workers worse off.

Many of the criticisms have been targeted at the government and policymakers for designing tax policies that failed to expand the tax net, but rather continue to overburden existing taxpayers, making it difficult for them to survive, especially in the current harsh economic climate.

There have been reports of businesses folding up or relocating due to huge tax burdens and claims of high cost of doing business in the country.

Dr Kombat, however, explained that the country’s tax policies and laws were in line with international standards and were not designed to put any business or group at a disadvantage.

The asst. commissioner, however, urged the general public to pay their taxes since it was the backbone of development and the means through which the government could undertake its activities.

For instance, he said in 2023, the government’s total revenue was GH¢136 billion, out of which taxes were made up of GH¢113 billion, representing 83.13 per cent.

“We must all contribute our quota in terms of taxes to help the government run the country. If we do not pay our taxes, the government will not get the needed resources to develop the country, Dr Kombat said.

Welfare

A Programmes Officer of SEND Ghana, Nana Kwasi Barning Ackay, urged the government to prioritise the welfare of the vulnerable in the 2025 budget, which is expected to be presented to Parliament before the end of this year.

“Any policy, including the budget that the government comes up with should reflect the needs of the poor and vulnerable in society,” he said.

writer’s email: emma.hawkson@graphic.com.gh