Business News of Tue, 18 Aug 20150
Don’t grant long tax holidays – Tax expert
A tax expert, Mr Abdallah Ali-Nakyea, has asked the government to review its tax policies that grant long tax holidays to prospective investors.
According to him, such long tax holidays to companies interested in investing in difficult sectors of the economy caused millions of revenue losses that could be used to undertake development projects.
"Granting tax holidays have never attracted any investor because they are only taxed after profit is made. Rather, what attracts investors is the economic infrastructure," Mr Ali-Nakyea said at a public lecture in Accra.
The lecture, organised by the Institute of Chartered Accountants Ghana (ICAG), was on the theme: "Plugging Ghana Government Revenue Leakages-the way forward".
Mr Ali-Nakyea said in order to boost investment and increase tax revenue, tax holidays given to some sectors must be shortened.
For instance, he said, the 10 years tax holidays given to agriculture such as livestock farming, cash crops and fish farming must be reduced to five years.
Mr Ali-Nakyea, who is also the Director of WTS Tax Consulting, raised issues with the tax processes, saying that the complexity of the tax procedure hindered people from paying their taxes voluntarily.
"Simplifying our tax processes and procedures does not only add efficiency, it also encourages voluntary tax payment," he said.
Touching on how to make tax processes more efficient, Mr Ali-Nakyea urged the Ghana Revenue Authority (GRA) to ensure that there were a lot more offices to reduce the pressure encountered at its main office the Kwame Nkrumah Circle in Accra.
The President of ICAG, Professor Kwame Boasiako Omani-Antwi, emphasised the need for the GRA to intensify its tax awareness campaign.
He said tax education had been woefully inadequate, and added that "this has led to people not realising the significance of paying taxes voluntarily".
According to Prof. Omani-Antwi, there was the need for administrative reforms to be reviewed in order to address the leakages in revenue generation.
For his part, a tax lecturer at the Pentecost University Graduate School, Mr Isaac Nyame, said political interference in tax administration and the attitude of some tax officials were some of the issues that needed to be addressed.
He, said the introduction of the single window system would address many of the leakages in revenue generation.