Issue tax identification number to businesses— Tax expert

A tax expert has called for the issuance of a tax identifi-cation number to businesses and organisations on all purchases, contracts and payments to help increase revenue mobilisation.

Speaking at a public lecture organised by the Institute of Chartered Accountants of Ghana (ICAG) on the 2016 budget in Accra, Dr. Abdallah Ali-Nakyea urged the government to take a bold decision to implement paragraph 845 of the budget statement of 2015 which enjoins all businesses to obtain a tax number before transacting business.

According to him, the implementation of the tax identification number was one surest way of blocking the loopholes in the tax regime while widening the tax net to generate adequate resources for national development.

Dr. Ali-Nakyea, who is the managing consultant of WTS Ghana and a lecturer at the University of Ghana, lauded the budget but called on the government to ensure strict enforcement, monitoring and evaluation to help consolidate economic gains of the country.

For instance, he said, there should be a mechanism to check the implementation of already existing tax laws and review them if necessary as part of measures to increase revenue generation.

He said for tax laws to work effectively, the government should constantly engage stakeholders in the drafting of such laws saying “stakeholder consultations should not be ignored in the development and passage of new tax legislation so as to engender enhanced and increased tax compliance”.

He again called for adequate support for the Ghana Revenue Authority (GRA) to equip them with the relevant skills and logistics to enhance their operations.

Dr. Ali-Kabreal said the GRA could generate more revenue for the country if its operations were conducted using adequate logistics and highly skilled human resource.

The Director of Budget at the Ministry of Finance, Mr. Patrick Nomo said the country witnessed significant expansion in output with the real Gross Domestic Product growing steadily from 3.7 per cent in 2000 to 9.8 percent in 2012.

“However developments in the economy between 2011 and 2012 led to setbacks in fiscal policy and the widening of the budget deficit to 11.5 per cent in 2013, the issues which brought about the setback,” he said.

He mentioned the setbacks as implementation challenges associated with the single-spine wage policy initiated in 2007 to correct distortions and inequities in the public sector wage structure and significant shortfall in grants from development partners.

Mr. Nomo said however in 2013 government took bold decisions to improve the fiscal situation saying to improve revenue performance and support the fiscal consolidation effort, government introduced comprehensive revenue measures.

These, he said included the National Fiscal Stabilisation Levy — levy of 5 per cent of profit before tax of banking, insurance, other financial services, communication, and brewery sectors with a sunset clause that ended at the end of 2014.

The President of the ICAG, Professor Kwame Omane-Bosiako commended the Ministry of Finance for producing such a comprehensive budget which addresses all aspects of the economy but urged it to ensure strict implementation.

By Charles Amankwa

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