Taxation is defined as a compulsory levy impose by government of a country on its citizenry and inhabitants to raise money to finance government activities. Every government the world over depends largely on tax revenue for its developmental projects. It is said that without taxes, most governments would cease to exist. An American Statesman, Benjamin Franklin rightly put it when he stated that “in this world, nothing is certain but Death and Taxes”. This wise saying implies that in as much as human society exist, death and taxes are inevitable. From the foregoing, one can like taxation as a blood that runs through the veins of nations, without it, the very foundation of nations would be in great danger and human existence would be very much threatened. Ghana being a Lower Middle Income country, is not an exception to this trend of relying on tax revenue for its development.
Notwithstanding this crucial role that taxes play in the country, many people appears to be ignorant of its importance. It is quite disheartening to hear people who are expected to know better showing gross ignorance to the extent of saying that their government is in power and so they are not supposed to pay taxes. Some government officials would go to the extent of chastising tax officers who may be doing their legitimate work to collect revenue for the state because they think the actions of the tax officials is making their government unpopular. Yet, these same people want government to turn the country into Heaven. By whatever means, only they can tell.
The general reception in the payment of taxes by the public can be said to be very minimal and the earlier something is done about it the better. Chapter six (6) of the 1992 constitution, Article 41 (j) states “the exercise and enjoyment of rights and freedoms is inseparable from the performance of duties and obligations, and accordingly, it shall be the duty of every citizen: to declare his income honestly to the appropriate and lawful agencies and to satisfy all tax obligations”.
How many people as well as entities, can be said to have honoured all their tax obligations voluntarily without any enforcement tool applied by tax officials? Many Ghanaians want Free SHS, subsidized fuel, good hospitals and roads, One District One Factory, One Village One Dam and many other good things in the country but do not want to pay taxes. Is this not ironic?
Per the Income Tax Act, 2015, Act 896 as amended, a person who earns a basic salary of GH¢600.00 per month would be expected to pay a tax of GH¢36.60 deducted at source. Similarly, an income earner of GH¢1,000.00 would be expected to pay a tax of GH¢102.75. However, in the informal sector, traders who are in stores, kiosks, containers and hawkers as well as commercial drivers who may be earning more than these formal sectors workers would always try to run away from tax officers who come to them to collect taxes. Some of these taxpayers are issued with Tax Stamps or Vehicle Income Tax (VIT) stickers and pay as low as GH¢10.00 per quarter and yet would be unwilling to pay. Many business men and women would also try to under declare their income in order not to pay the right tax.
Fiscal Data Information from the Ministry of Finance indicates that in the year 2015, government received a total revenue of GH¢32.04billion. Out of this amount, GH¢24.14billion, representing over 75% came from taxes. Again in 2016, an amount of GH¢25.70billion which represent about 76% was collected as taxes out of government’s total revenue of GH¢33.68billion. The same trend can be seen in the current year, 2017, where tax revenue is targeted at GH¢34.00billion and total revenue at GH¢44.00billion. This goes to show that a chunk of government’s revenue over the years comes from taxes. It therefore reason to conclude that, if any government can perform very well to the satisfaction of the citizenry, then more taxes needs to be collected in order to increase total revenue to enable government to do more developmental projects.
Mathew 22:21 states “And He (Jesus) said to them, “Render therefore to Caesar the things that are Caesar’s, and to God the things that are God’s.” Jesus therefore supported the fact that we should all give to the state what it is due. A Christian who thus claims to pay his/her tithe faithfully but fails to pay taxes due the state does not qualify to be called as such. The same can be said about other religious denomination. You cannot therefore be called a good Muslim when you do not pay your taxes. When any country gives loans or grants to Ghana, it is not that these nations purposely print new currencies to be given to us, but rather, it is out of the taxes that have been collected that they give to us as loans or grants.
The UK with almost the same land area of about 240,000sqkm as Ghana is said to have collected a total tax revenue of £550.00b (Five Hundred & Fifty Billion Pounds Sterling) in the year 2016. During the same period, Ghana collected a total tax revenue of £5.50billion (i.e. GH¢25.70billion). That is, Ghana’s total tax revenue collected in 2016 was 1% of what was collected in the UK. This suggest the low level of interest shown by Ghanaians towards payment of their taxes notwithstanding other factors.
The Way Forward
That is why it is more appropriate that the agency responsible for the collection of taxes in the country, the Ghana Revenue Authority (GRA) on Wednesday 1st November 2017, launched a National Campaign to Improve Tax Compliance. The theme of the Campaign has been #OurTaxes-OurFuture. This is to remind everyone that our taxes helped to provide for the Free SHS. Roads, hospitals and environmental protection rely on the taxes we pay. The GRA has since the launch been involved in a numbers of publicity programmes. These includes multi-media campaign involving radio, television and the press. So far, there have been radio jingles, television programmes, town hall meetings and regular discussions about tax issues as well as a special theme song.
At the launch of the National Tax Campaign, The Commissioner General of the GRA, Mr. Emmanuel Kofi Nti painted a gloomy picture of the number of people in the tax bracket and said “Even though many Ghanaians are engaged in income-earning activities particularly in the informal sector, only about 1.2million people are registered for tax purposes. Out of the number, about one million are in the formal sector, leaving only about 200,000 in the informal sector”. This he said is not the best for the growth of the country. The President, Nana Addo Dankwa Akufo-Addo in his recent visit to the Tema Port during the Greater Accra regional tour stated that the GRA is the future of Ghana. It is therefore incumbent on us all to be citizens by paying our taxes promptly for a better Ghana and not be spectators by refusing to pay our taxes.