Business News of 2014-03-08

Ghana's weak tax system breaking economy - Report

An international taxation institution, TAX JUSTICE NETWORK-AFRICA has identified Ghana as one of many African countries where financial secrecy and tax havens are crippling economic growth.

An investigative report by the group shows that Ghana has a weak tax authority with limited expertise and resources to tackle tax abuse.

The poor enforcement of the country’s tax laws also means that its high net worth individuals, often evade tax.

The report which received support from Ghana Integrity Initiative and the Christian aid mentioned that tax exemptions are proffered by governments that mistakenly believe tax breaks will attract sustainable investment.

Programs manager of Christian Aid, Ernest Okyere in an interview with XYZ News said these inequalities in taxation in many African countries had resulted in the widening of the gap between the rich and the poor.

The report investigated income inequality in eight sub-Saharan countries, namely Ghana, Kenya, Malawi, Nigeria, Sierra Leone, South Africa, Zambia and Zimbabwe, and examined the ability of the tax systems in each to redistribute wealth.

Meanwhile, a financial analyst, John Gatsi, says Ghana has a lot to do to reform the tax regime.

Last month, the World Bank and the International Monetary Fund advised Ghana to reform her tax regime by widening the net to raise more revenue.

Mr. Gatsi said it is an indictment on the Revenue Authority that it has failed to roll out meaningful tax reforms after several complaints and calls to that effect.