The Ghana Revenue Authority (GRA) has hinted of plans to further digitise tax payments through mobile money services, as part of efforts to boost tax collection as well as increase informal sector contributions to tax revenue.
The tax authority believes the innovation, which is still under consideration, will facilitate tax payment while encouraging voluntary tax compliance – particularly among those in the informal sector, which accounts for about 70 percent of the national economy.
In spite of its dominance in the national economy, the informal sector’s contribution to total tax revenue is far below expectations.
According to the GRA, the informal sector contributes less than 2 percent of the total tax revenue. The tax revenue to the GDP is 16.7 percent.
Available statistics show that people who pay taxes are less than 25 percent of potential taxpayers, an indication of low tax compliance among Ghanaians.
The authority contends that out of the about 8 to 9 million economically active people in a country of over 26 million Ghanaians, only 1.2 million are taxpayers – and of which the informal sector contributors are about 400,000.
The Ashanti Region, for example, has one of the most robust economies outside the Greater Accra Region and contributes less than 4 percent to the country’s tax revenue.
Commissioner General of the GRA Mr. Emmanuel Kofi Nti said it is about time all income-earning Ghanaians, particularly informal sector actors, contributed their fair share to tax revenue in aid of national development.
He noted that the Ghana Revenue Authority is working assiduously to improve tax collection, and is at the moment developing a database of all taxpayers – working in close collaboration with all the relevant state institutions.
With a proper identification of all taxpayers in place, the authority will be in a position to deepen its interaction and engagement with taxpayers and work toward increasing tax payments and collections, he told the B&FT during a tax forum in Kumasi.
The forum, with various trade groups and associations in attendance, was part of the ongoing national tax campaign dubbed ‘Our Taxes, Our Future’.
The national tax campaign seeks to develop and sustain a national conversation on tax issues.
The GRA, in the 2018 Budget, has a GH¢40billion target to boost government’s revenue base. But it has so far not been able to meet its revenue target of GH¢34billion set for 2017.
As at September, the GRA was about -3.6% behind its target. However, it has said it is working hard to meet it by close of the year.
The Technical Advisor to the Commissioner General, Mr. Henry Yentumi, acknowledged the processes of tax collection and payment will have to improve, and said that the GRA is working on it.
For example, he said, the authority is keen on developing its automation systems as a key aspect of its strategy.
Representatives of various trade groups in Kumasi, at the forum, used the opportunity to seek clarification on various taxes charged by government on traders – particularly the 3 percent VAT Flat Rate.