By Christopher K. BEYEREH
Christmas is a time of joy and giving, but in Ghana, December forth yearly also coincides with a critical period of elections and taxation. The country’s developmental trajectory is heavily influenced by these two factors, (Taxation & Elections) which often pose a dilemma for its leaders.
There is plethora of promises on taxation by various political parties, either to reduce taxes, or to simplify taxes. But in Ghana, political promises mend a different thing altogether from the reality when a political party emerges victorious.
Whereas there is litany of juicy promises by political parties, those can only materialize by the ability to mobilize enough domestic revenue. The revenue agency mostly records revenue decline especially at its Ports due to the “wait and see” attitude by importers as triggered by the election’s uncertainty.
The business community will usually be very diligent in their approach in election years. However, the Christmas neutralizes the nuances as it comes with increase in expenditure by the public.
This usually will lead to an increase in the volumes of indirect taxes, which are basically consumption dependent. All things being equal, the volumes of Value Added Tax (VAT) are expected to increase due to the high levels of consumption during the Christmas period.
Elections and clientelism
Ghana’s elections are characterized by clientelism, where voters expect their representatives to provide specific benefits in return for their support. This patronage system undermines the legitimacy of domestic taxation, making it challenging to establish a collective interest for national development. Citizens tend to interpret allocation decisions over expenditure of revenues as products of patronage relations rather than as a collective public good.
Taxation and development
Taxation plays a crucial role in Ghana’s development. However, the country’s tax system is plagued by inefficiencies, and somewhat serves as political playground during elections. The government relies heavily on central transfers, which creates a culture of dependency among local authorities and agencies.
Ghana’s taxation and development trajectory has been shaped by its economic history, policy reforms, and institutional factors. After gaining independence in 1957, Ghana implemented various economic policies, including structural adjustment programs, to stabilize its economy.
That apart, governments have through the Ghana Revenue Authority introduced measures to enhance revenue mobilization, including improvements in tax administration and policy reforms. Despite these efforts, Ghana’s tax-to-GDP ratio remains relatively low, highlighting the need for continued reforms.
So, if you are spending during the Christmas, ask of your VAT invoice just to be sure that you are contributing to the development of Ghana in a form of indirect tax.
Christmas and taxation
Christmas is a time of increased public spending in Ghana. The government often allocates significant resources for festivities and events, which can divert attention from critical development projects.
This raises questions about the prioritization of public spending, and the impact on the country’s developmental goals. As much as it’s a season of spending spree, governments must be guided by taxpayers’ sentiments in relation to public good, and exercise prudence in public administration and in accordance with law.
The way forward
To address the developmental dilemma posed by elections, taxation, and Christmas, Ghana needs to strengthen local Governance, and improve the capacity of the revenue agency to mobilize revenue, and implement a more efficient and transparent tax system that promotes fairness and accountability.
Ghana must also prioritize developmental Spending and ensure that public spending aligns with the country’s developmental priorities, even during periods like Christmas and elections.
Overall, Ghana’s taxation and development trajectory reflects its efforts to stabilize its economy, strengthen institutions, and promote social accountability.
By addressing these challenges, Ghana can create a more sustainable and equitable development trajectory that benefits all its citizens.
Remember, that peace is inevitable in the development value chain. Let us all remain peaceful, before, during and after the elections in other to celebrate the Christmas with love and a united force as one nation. Merry Christmas, and a Prosperous new year.
The writer is a Chartered Marketer, a tax worker, & a Marketing Consultant with over 10 years of experience in the Service Industry. He can be reached via [email protected] or +233205366152
