More than four million workers from the informal sector have not been paying taxes to the government because officials from the Ghana Revenue Authority (GRA) cannot locate them.
The number represents more than half of the total number of tax-paying workers in the country.
The problem has been attributed to the absence of a proper address system to assist tax collectors to locate them.
The Commissioner of the GRA, George Blankson, was speaking at the closing ceremony of the sixth annual International Tax Conference, on the theme: ‘strategies for revenue mobilisation in contemporary times: challenges in tax legislation’in Accra yesterday.
He said the country was losing huge sums of revenue due to the inability of the authority to rope the workers into the tax net.
Mr Blankson noted that a proper address system would, help the GRA to locate workers in the informal sector, who constituted about 70 per cent of the active labour force of the country.
He indicated that the GRA could generate more revenue for the state to support developmental efforts if it was able to locate all the workers who had not been paying taxes.
Mr Blankson stressed the need to revive the National Identification project, and called for a proper address system to enable the authority to cast the tax net wider to include workers in the informal sector.
The First Deputy Governor of the Bank of Ghana (BoG), Dr. Millison Narh, in a speech read on his behalf, observed that a robust tax system was critical for economic growth and fiscal policy management.
He said the fiscal deficits the country had been recording over the years could be corrected if more people were made to pay taxes to the government.
The BoG deputy governor urged tax collectors to be proactive in their tax collection but should not make it a burden on workers.
Per international standards, he said, countries were supposed to general 20 per cent taxes of their GDP but countries in Africa had not been meeting that target.
Dr. Narh noted that the imposition of taxes on a few workers in an economy brought inequality in the tax system and added that the problem could only be addressed by widening the tax net to capture all tax-paying workers.
He attributed the weak tax system to the inability of the GRA to cast the tax net wider and the unreliable tax payer data base.
The president of the Chartered Institute of Taxation (Ghana), Nii Ayi Aryeetey, said it was important for the GRA to look for new ways to reach out to the taxpayers, while educating them on the need to honour their tax obligation.
He also added his voice to the call for a proper address system to enhance tax collection for national development.
Nii Aryeetey said with the passage of the Chartered Institute of Taxation Act, 2016, (Act 916), the institute would remain focused on achieving its goals.
By Yaw Kyei and Antoinette Deku