Written By Naa Korkoi Essah - Ghanaians are often described as law abiding. Most workers in the public sector, for instance, endeavour to pay their taxes as required. In this sector, taxes of workers are the first to be deducted on the pay slip. Yet for love of country, peace still reigns.
This is, however, not the case in the informal sector as was made evident when the Ghana Revenue Authority (GRA) rolled out a Comprehensive National Tax Campaign recently. Most people in the informal sector are not complying with the payment of their taxes.
Available statistics indicate that although most Ghanaians are engaged in income-generating activities, only about 1.2 million are registered to pay taxes. Out of this number, about one million are in the formal sector while only about 200,000 are in the informal sector. It is, therefore, evident that the contribution of the informal sector to tax revenue is minimal, that is, below five per cent.
The campaign christened: “Our Taxes, Our Future”, therefore, sought to whip up the zeal of tax payment among Ghanaians. It was also to increase awareness of the benefits of taxation, as well as consequences of non-payment of taxes. Again, it will reassure compliant taxpayers that the system is fair.
It is important for Ghanaians to understand the need for payment of taxes. Tax payment remains a civic responsibility which every Ghanaian, no matter the amount earned, must carry out.
It is through taxation that the government constructs and improves upon social amenities and infrastructure such as roads, hospitals, schools and others. Taxes, therefore, remain government’s major source of revenue for financing its budget and accelerating developmental plans.
What most Ghanaians do not know is the availability of a tax relief system entitled to the taxpayer annually. This relief is an approved deductible allowance from accessible income of an individual intended to reduce the taxable income, thereby making less, the tax burden on an individual. These include old age, child education and cost of training.
Meanwhile, penalties and sanctions exist for those who fail to comply with their tax obligations (The Revenue Administrative Act, 2009 (Act 791). A person who fails to file a tax return as required by the law is liable to pay a penalty of five hundred currency points and a further penalty of ten currencies for each day that the failure continues. One can be sanctioned for failure to comply with the provision of the tax law; making false or misleading statements among others.
The campaign stressed the need for all taxpayers to register with the Ghana Revenue Authority (GRA) which requires the application of a TIN (Tax Identification Number) and the registration of businesses. TIN is required to expand a number of specified institutions, expand requirement for usage and provide ancillary provision relating to TIN.
The Commissioner General is obliged to set up a Taxpayer Identification Numbering System for the purpose of identification and promotion of tax compliance.
A person is required to show his or her TIN in any claim, declaration, notice, return, statement or other documents used for the purpose of a tax law—(Includes correspondence to the GRA or Ministry of Finance (MoF, exemptions, waivers etc).
As Ghanaians, therefore, we must endeavour to make the registration of our businesses a necessity through the right procedures thereby ensuring the fulfilment of our tax obligations towards our nation for a better Ghana.