Opinions Thu, 4 Apr 2013

Re: President Mahama has filed his taxes

EDITORIAL: Re: President Mahama has filed his taxes

The story that President Mahama has filed his taxes (April 2, 2013) is a

welcome indication of the change in attitude of our President, and worthy of

emulation. Action speaks more than words, as the saying goes.

The key issues, though, are for the President to ensure that the laws of the

land are adhered to and there is discipline in the system enough to punish

those who don't file their taxes, or file false taxes. It is common

knowledge that Ministers, Parliamentarians and Government executives are

taxed on only their base pay, which may be in the range of $48,000 to

$84,000 but earn more than $100,000 an average for cash payments in

envelopes for attending meetings, travelling and conferences. Why are these

not taxed? MIT and Harvard Professors Acemoglu and Robinson have described

these as "extractive" political and economic institutions, which we will

call a system where people in power take the lion's share of the meat,

leaving the bones of society to the Ghanaian masses.

The President has shown a good gesture and what we recommend is for him to

go beyond symbolism. Let the axe fall where everybody will file their taxes.

The idea of charging gargantuan taxes of 45% to 200% on imported vehicles

and items depletes cash capital at the very entry point to Ghana, and

creates great entry barriers for those who could use the capital to start a

business. It also creates high inflation as small vehicles, tools and

machinery are sold at many times the salary of the worker or small business

person, and merchandise and produced goods will have to be raised in prices.

High import tariffs also become a disincentive for other taxes and makes it

very unattractive for some to invest their capital. In addition there is

the feeling that people have already paid their taxes in duties and VAT and

NHIL at the ports and hence even property taxes are ignored or very

inadequate to meet local developmental needs.

For those not aware, new tax ID numbers are given for every import, as we

have verified. Taxes and ID numbers are not related to any retirement or

other social benefits. What is the incentive in paying taxes, then, if

government cannot deliver or allow private companies to produce and deliver

utilities such as water and electricity, and build roads and highways and

sewage systems we all need!

We strongly recommend to the President to go beyond the showmanship of

paying his taxes.

(1) He should make Ghana's tax payments be recorded in a database for each

individual according to his national ID number, and tied to retirement and

other benefits.

(2) He should demand that every public official, as also private income

earners, pay their taxes by a certain date or be in violation of the law and

some penalties added.

(3) While taxes are personal, we believe that public officials' salaries,

assets and taxes should be a matter of public interest. As such annual asset

and income filing should be enforced.

(4) We also recommend that all income and benefits including petrol

allowances, housing, vehicle and food allowances during travel, or any other

benefits in cash should be counted for tax purposes.

(5) Lastly, we recommend that the President should pay his taxes on his base

income just like all citizens, and not be exempted. The President should

share the pain of the ordinary person in Ghana. Lastly we recommend that

(6) No public official should have taxpayer funds used to build water

reservoirs and Power Generators. Let them bear such cost and share the pain

of the society.

Dr. Kwaku A. Danso, Email: dansojfk@gmail.com

President - Ghana Leadership Union (NGO), Moderator-GLU and GLF Forums.

Author: Leadership Concepts and the Role of Government in Africa: The Case

of Ghana

Columnist: Danso, Kwaku A.