This is a subject that has resolutely been close to my heart since I was old enough to tell my right from my left or work out the fact that, one green orange and one golden orange make up two oranges. Whether they are both ready to eat is another matter left to your imagination.
On a more serious note, Taxation in our beloved country, you will agree with me, is shambolic. Decades of regimes and governments blessed with some of the finest minds our country has ever had, in the fields of economics, finance and mathematics; have come to pass with little attention to or impact on this fundamental area of nation building and national prosperity.
The question you and I need to ask ourselves and our leaders of today and those of days long gone by, is a simple WHY? Why has it not occurred to any body to dream about putting in place a simple system of taxation and the processes and mechanisms needed to make the system work? A nifty and workable system, which reflects our terrain, our people and our circumstances. In asking this and other pertinent questions regarding national development and prosperity, we come across the ever so condescending and ever so rehearsed and ready made answer, ‘we already have this, that, blah, blah, blah in place; you need to check your facts etc. The question then is, if you have it in place, why is it not working, why aren’t we seeing the fruits of it, the impacts of it in the development of the motherlands economy? For me, the ‘business as usual’ answer only brings up more unanswered questions around the lack of or blatant disregard for effective strategy, planning, implementation, and evaluation of projects, schemes, ideas, reforms, legislation and government actions; all essential ingredients in nation building and economic sustainability.
Coming back to the issue of Taxation in Ghana, I want us to examine a basic component for a moment; INCOME; this is the lever or back bone of all taxation systems. The International Accounting Standards Board defines Income as the increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other than those relating to contributions from equity participants. [F.70] (IFRS Framework).In the lay mans language; the above simply means money that is received as a result of the normal business activities of an individual or a business.
According to Ghana’s Taxation regulation, “the chargeable income of a person for any year of assessment is the total of that person’s income for the year from each business, employment, and investment less the total amount of deductions allowed to that person”[1].
If my understanding of the above statement is right, then every single working age resident Ghanaian (aged 16+) is required to pay some amount of tax as appropriate, having factored in their necessary relief’s e.g. income levels, student statuses, household compositions and arrangements and resident types just to mention a few. However, the million cedis question is, are people paying their taxes, are there effective structures and mechanisms to ensure that people are paying up either personally or through PAYE?, is the rule of law and current structures beyond corruptibility with a 95 % confidence interval? I think your guess is as good as mine! The argument that is peddled about in defence of government and the powers that be; is the fact that our country is mostly rural, with a lot of informal and traditional ventures or a lack of formalised business ventures. But we all know this is cheap. Which prosperous nation the world over evolved automatically as a formalised system? None! My brothers and sisters, none! The issue is, if we can’t put in place the right structures and systems to maximize our nations potential, then why bother at all?
You and I have got what is called people power, the power of the electorate, the power to call to action, the power to call for action from the powers that be to uphold the rule of law, the power to present our own selves and be willing to pay our due to contribute towards a prosperous Ghana. We are the change we have been calling for or aspire to; we have it within us to introduce or bring about private member bills in parliament which directly or indirectly will bring about change.
‘Every little counts’. Every action, every word, every challenge, every radio, internet, and newspaper contribution counts. Let us all stand up to the status quo, let us fight, and work hard to engineer change. God bless Ghana.
[1] 2006 Tax Facts and Figures* Price Water House Coopers(Ghana)
A quick guide to Taxation in Ghana
On a more serious note, Taxation in our beloved country, you will agree with me, is shambolic. Decades of regimes and governments blessed with some of the finest minds our country has ever had, in the fields of economics, finance and mathematics; have come to pass with little attention to or impact on this fundamental area of nation building and national prosperity.
The question you and I need to ask ourselves and our leaders of today and those of days long gone by, is a simple WHY? Why has it not occurred to any body to dream about putting in place a simple system of taxation and the processes and mechanisms needed to make the system work? A nifty and workable system, which reflects our terrain, our people and our circumstances. In asking this and other pertinent questions regarding national development and prosperity, we come across the ever so condescending and ever so rehearsed and ready made answer, ‘we already have this, that, blah, blah, blah in place; you need to check your facts etc. The question then is, if you have it in place, why is it not working, why aren’t we seeing the fruits of it, the impacts of it in the development of the motherlands economy? For me, the ‘business as usual’ answer only brings up more unanswered questions around the lack of or blatant disregard for effective strategy, planning, implementation, and evaluation of projects, schemes, ideas, reforms, legislation and government actions; all essential ingredients in nation building and economic sustainability.
Coming back to the issue of Taxation in Ghana, I want us to examine a basic component for a moment; INCOME; this is the lever or back bone of all taxation systems. The International Accounting Standards Board defines Income as the increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other than those relating to contributions from equity participants. [F.70] (IFRS Framework).In the lay mans language; the above simply means money that is received as a result of the normal business activities of an individual or a business.
According to Ghana’s Taxation regulation, “the chargeable income of a person for any year of assessment is the total of that person’s income for the year from each business, employment, and investment less the total amount of deductions allowed to that person”[1].
If my understanding of the above statement is right, then every single working age resident Ghanaian (aged 16+) is required to pay some amount of tax as appropriate, having factored in their necessary relief’s e.g. income levels, student statuses, household compositions and arrangements and resident types just to mention a few. However, the million cedis question is, are people paying their taxes, are there effective structures and mechanisms to ensure that people are paying up either personally or through PAYE?, is the rule of law and current structures beyond corruptibility with a 95 % confidence interval? I think your guess is as good as mine! The argument that is peddled about in defence of government and the powers that be; is the fact that our country is mostly rural, with a lot of informal and traditional ventures or a lack of formalised business ventures. But we all know this is cheap. Which prosperous nation the world over evolved automatically as a formalised system? None! My brothers and sisters, none! The issue is, if we can’t put in place the right structures and systems to maximize our nations potential, then why bother at all?
You and I have got what is called people power, the power of the electorate, the power to call to action, the power to call for action from the powers that be to uphold the rule of law, the power to present our own selves and be willing to pay our due to contribute towards a prosperous Ghana. We are the change we have been calling for or aspire to; we have it within us to introduce or bring about private member bills in parliament which directly or indirectly will bring about change.
‘Every little counts’. Every action, every word, every challenge, every radio, internet, and newspaper contribution counts. Let us all stand up to the status quo, let us fight, and work hard to engineer change. God bless Ghana.
[1] 2006 Tax Facts and Figures* Price Water House Coopers(Ghana)
A quick guide to Taxation in Ghana
