Terkper calls for practical measures to curb tax leakages

Business News of Monday, 8 April 2013

Source: B&FT

Seth Terpker Finance

The Minister of Finance and Economic Planning, Seth Terkper, has charged personnel of the Ghana Revenue Authority to put in place practical measures to curb leakages in the tax system while coming up with innovative ideas to deepen the country’s tax net.

According to the Minister, available statistics show that out of the entire population of about 24 million Ghanaians, only about 1.5 million people pay direct taxes — of whom just 5% is made up of those in the informal sector.

Those in the informal sector, he reckons, continue to be the worst offenders when it comes to tax evasion despite the sector’s 70% control of the economy.

“This situation is unacceptable and efforts must be made by the GRA to rope-in these potential taxpayers from the sector outside the tax net. We need to plug all the loopholes to prevent leakages in the tax system,” he said.

He therefore commended the Authority for its sterling performance in the previous year, and asked for more to be done to increase the percentage of taxpayers in the informal sector from the present 5% to double digits.

These pronouncements were made on behalf of the Minister at the start of a 4-day retreat by the Ghana Revenue Authority in Kumasi to review the programmes, activities and performance of GRA for 2012, and strategies for 2013 on how to accelerate the pace of the revenue reform process.

It is hoped the retreat will also help GRA to identify its weaknesses and shortcomings, and take remedial measures to ensure optimum performance moving on forward. The event was held under the theme “Implementation of the GRA 3-year modernisation plan (2012-2014); accomplishments, challenges and interventions for the way forward.”

The Ghana Revenue Authority (GRA) in the review of its performance for 2012 recorded an impressive performance by exceeding its annual target by GH?300.52million — representing a 2.6% growth in revenue mobilisation and marking a comparative difference of 34.70% above the 2011 revenue collection.

This achievement also increased the tax to GDP ratio from 16.3% in 2011 to 17.5% in 2012. The Commissioner General of GRA, Mr. George Blankson, announced the payment of staff compensation in terms of annual bonuses, and also promised incentive bonuses arising from the excess to be paid soon.

Revenue mobilisation for this year, 2013, might be reduced; considering the present challenging economic environment as a result of the ongoing energy crisis. However, it is hoped that in the midst of these challenges much effort will be deployed by the tax authority to rise to the task ahead.

Government is said to have made available to GRA 105 out of the 250 fleet of vehicles it promised to help ease the mobility problems of the Authority. The rest of the vehicles are to be provided as soon as part of Government’s commitment to provide the needed finance and logistics to ensure the success of the modernisation programme of the Authority materialises.

To fully realise the quest to ensure that the citizenry (particularly those in the informal sector) become tax-compliant, GRA has been asked to pursue continuous and sustained public education to deepen the understanding on the need for honouring the payment of taxes, which is a civic responsibility.

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