Majority of MSMEs unwilling to pay more taxes for govt services - CDD Report

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Fri, 19 Nov 2021 Source: www.ghanaweb.com

62% of MSMEs do not want to pay more taxes

81% of owners of businesses submit their annual returns to the registrar General’s department

The majority of MSMEs are not satisfied with their return on tax payments

About 62% of Medium Small Micro Enterprise owners/caretakers operating in the country are said to be unwilling to pay more taxes even if that qualifies them for more government services, a CDD report has shown.

Per finding from the report, there is a mismatch in the opinions of MSMEs on the willingness to pay more taxes even if they knew how the government spends tax revenues.

The report under the theme, ‘Access to Justice and Public Services, Experience of Medium, Small and Micro Enterprises (MSMEs) in Ghana, said most 81 percent of the respondents said they are aware they have to submit their annual returns to Registrar-Generals Department and have done so.

“82% of MSME owners/caretakers accept the legal mandate of the tax authority to demand tax whiles 75% forming a majority with registered businesses are aware that they are expected by law to submit their annual returns to the Registrar General Department, with 81% reporting that they have submitted their tax returns. Most MSMEs owners/caretakers think it is not easy to access information on taxes and fees they are expected to pay (78%), how revenues from fees/levies are utilized by MMDAs (87%), and how the government uses tax revenues (81%).”

The report noted that significant minorities of MSME owners/caretakers are largely dissatisfied with services they receive in return for tax payments they make (between 29% and 47%).

Consequently, female-owned businesses are more likely than male-owned businesses to be highly dissatisfied with services received in return for paying VAT, income tax, and property rate.

The minister of finance in his presentation of the 2022 budget noted that less than 10% of Ghana’s 30.8 million pay direct taxes.

“Only 2,364,348 are bearing the burden of the entire population as taxpayers as of August 2021,” he outlined in his budget presentation in Parliament on Wednesday, November 17, 2021”

This he describes as a “poor reflection” on the country’s economy as compared to most middle-income companies.

Source: www.ghanaweb.com