More Taxes Would Stop Gov’t Borrowing – GRA


George Blankson, Commissioner General, GRA

Even though professional tax experts and organisations have criticized government and the Ghana Revenue Authority (GRA) for not consulting well enough on the new Income Tax Act before pushing it down the throat of the citizenry, Tony Dzadzrah, a tax policy analyst at the GRA, thinks otherwise.

According to Mr Dzadzrah, who was speaking at a public workshop organised by the GRA Friday in Accra, the ideology behind the GRA’s introduction of the new Income Tax Act was to tax every Ghanaian and raise revenue to stop government from going to borrow.

“We want to raise enough revenue so we won’t go borrowing. Let’s shake the philosophy of our income tax law. Let every income be taxed in Ghana so that when we are able to pass it and broaden the tax base, we can reduce debt in Ghana.”

Return of 1 percent tax

He emphasised that “the 1 percent thing is a good tax law that must come back. Even if it is 100 years, it must come back but we just have to reduce the threshold so that we don’t add everyone to it. So that you touch only higher level investment, so it could come back…. All the things that have been exempted sometime ago, let’s bring them to the tax bracket.”

“I was telling Dr Larbi Siaw and Seth Terkper that some of them are too fine tax experts.  They should allow some small mad men who don’t understand the operations so well to push it forward….Let’s revolutionarise otherwise we will borrow and borrow because the guys out there are not merciful on us at all. The best we can do for our country is to get our tax system right, coordinate, raise our revenue so that we don’t go borrowing too much,” he added.


Difficult provisions

A consultant with Deloitte & Touche touched on the adhoc guidelines to the country’s tax laws.

“Sometimes some provisions come with very difficult ways of implementing them. How I wish that administrators of the law – the GRA – should look at coming out with timeous guidelines on some of these provisions that will help to diffuse the confusion in the system. Or even for the business and investing community gets a clear understanding of how to implement some of these things depending on what is happening in the system. The Commissioner General can come out and give a detailed guideline on a particular issue that serves as a guide for consultants and businesses to know what to do with such law.”

Capital allowances

Chris Asiedu of KPMG said that in the new Tax Act, especially where capital allowances was covered under Section 14 where there is the limitation clause, under petroleum operations 67 (1b) without limitation clause and also in mining and general operations, under 81 (e) without limitation clause.

He said such a conflict should be resolved and further called for the gift tax issue to be reviewed.

“If all gift is taxable, if someone dies interstate, and leaves an estate to their children, does it mean their children would pay a gift tax on the estate? So we need to quickly look at those aspects.”

By Samuel Boadi