Re-thinking the consequences of tax evasion on Ghana’s economic growth, 66 years after independence

 Non-Compliance to tax obligations can adversely hamper the development of any nation and Ghana is not an exception. The illegal practices reduce government revenue while perpetrators, in some instances, usually get away with such offences, leaving the country to suffer.

It, therefore, behooves every member of the public, especially Ghanaians, to unite against tax evasion instead of always com­plaining about the current economic crisis facing the country. Everybody has a contri­bution to make in one way or the order to realise the Ghanaian dream of a stronger economy with impeccable infrastructural development. This cannot be possible if people continue to deliberately refuse to honour their tax obligations.

Revenues generated from taxes constitute a major source of income for governments

As Ghana celebrates its 66rd indepen­dence day, let us reflect on the theme for the occasion, “Our Unity. Our Strength. Our Purpose” and know how we can contribute towards finding our purpose once again as a country.

It is disheartening that 66 years post-inde­pendence, some business entities in Ghana still find it easy to evade tax. More worrying is the fact that these culprits are mostly foreign owned companies. They are unable to rob the country of certain huge revenue without the help of certain officials at the Ghana Revenue Authority (GRA), who sadly are Ghanaians. This situation which has been reported severally by the media has been the situation from time immemorial.

However in October 2022, about 48 businesses were reported to be undergoing prosecution for evading taxes and failing to issue Value Added Tax (VAT) invoices on purchase of goods and services.

According to the Commissioner-General of GRA, Rev. Amishaddai Owusu-Amoah, who revealed this at a forum last year, the businesses were put before the Tax Courts for acting in contravention to Section 80 of the Revenue Administration Act 2016 (Act 915).

He explained that, the prosecution of tax defaulting businesses was one of the strat­egies adopted by the Authority to promote tax compliance and enforcement.

As at the end of September last year, Mr Owusu-Amoah said the GRA had collect­ed GH¢51.6 billion as against a target of GH¢52 billion.

“We fell short of the target by GH¢466,000. The performance represents nominal growth rate of 29.0 per cent over same period compared to last year’s collec­tion of 26 per cent. Domestic revenue grew nominally by 28.6 per cent while Customs revenue grew nominally by 29.8 per cent,” he added.

He revealed that an online self-service system known as the taxpayers portal which allows taxpayers to file returns, initiate payments and access other tax related services such as Tax Clearance Certificates (TCCs), apply for tax reliefs, withholding tax exemptions, refunds and update of taxpayer information had been introduced.

The Commissioner-General also noted that the Electronic VAT invoicing was intro­duced to eliminate invoice cloning, carding and non-issuance of invoices and other irregularities which were affecting domestic tax performance.

Additionally, the Authority, he said, had instituted an Informant Award Scheme to award individuals, entities or organisations who offer confidential information to the GRA , leading to the recovery of tax adding that an informant was once paid GH¢130,000 for helping the Authority to recover tax.

“We encourage persons or individuals who have such information to call GRA. The information one provides will be treated with utmost confidentiality and where the information leads to the recovery of taxes, the informant will receive cash amounts in line with our Informant Policy,” the Com­missioner-General stated.

Also, to improve the culture and profes­sionalism of staff of GRA, he noted that a new Code of Ethics that defines the expect­ed staff behaviour in line with GRA’s values of integrity had been published.

Despite the measures taken by the GRA to salvage the situation many others still manage to continue with the illegal act because after the arrest of the managers of some of these companies defaulting their tax commitments, they are released and given the liberty to continue operation without facing prosecution.

These culprits in most cases remain confi­dent to keep defaulting their tax obligations because of their alleged dealings with some agents popularly known as ‘goro boys’ who are allegedly used by some officials at the GRA to take bribes from defaulters so that they could be covered or protected.

A typical example is when one of Ghana’s busiest commercial centers, the Accra Mall, was forced to pay a tax amount of GH¢­2million tax arrears it owed the government in 2017 after the GRA attempted to shut it down. The case should not have ended there but rather pursued to the courts and culprits convicted to serve as a deterrent to others.

Why must the GRA look on whiles a company owes up to GH¢2 million in tax arrears if there are no insiders covering the companies who easily get away with such acts?

If the country wants to bring an end to tax evasion to be able to generate more revenue for the development of the country, stringent measures must be put in place to ensure this. Citizens must be ready to desist from pursuing their selfish gains and rather join efforts to bring an end to any act that negatively affects the progress of the nation. We can never call Ghana truly independent if we still rely on other countries for money to run the affairs of the State. Individuals deliberately channeling State revenues into their personal accounts must also have a re-think about their acts and think about the harm their action could cause the future generations.

The prosperity of Ghana does not rely solely on government.

Voluntary Tax Compliance

The public, Ghanaians, especially, must be patriotic enough to be willing to pay their taxes to the State without being forced to do so.

There are many businesses now operating solely on social media, how they can the GRA track all these businesses and ensure they pay their taxes. Today, people even do business on their WhatsApp statuses and are able to escape without paying any taxes. Patriotism is the only trait that can make an individual’s voluntarily pay their taxes with­out being forced to do so. Government must therefore ensure the masses are satisfied with its policies so that there would not be any situation where citizens would not feel obligated to pay their taxes.

The Government must also make tax affordable to make more Ghanaians pay taxes willingly, for rapid socio-economic de­velopment. When taxes become a burden to citizens, voluntarily meeting tax obligations become difficult or impossible.

If we want to see a tremendously trans­formed Ghanaian economy, let us all join our strengths with the purpose of realising the need to make tax evasion a thing of the past to make it flexible for government to finance its expenditure by relying solely on revenue generated from within the country.

Tax evasion is indeed a threat to Ghana’s economic development and needs to be controlled or brought to an end.

A united, strong and purposeful Ghana is possible!!!


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