Display options Mobile website
City Facilities Management Limited

Business News of Tuesday, 29 January 2013

Source: Economy Times

Major tax reforms in the offing

Adnan A. Mohammed

The Finance Minister-designate, Seth Terkper will in the next couple of months initiate moves to comprehensively review the three major tax laws; the Value Added Tax, Income Tax and Customs as well as the tax administration act. This is expected to universalize the revenue collection base of the country. These laws according to the Minister designate are out-of-date and not too efficient.

He told the Appointment Committee of Parliament when he took his turn for vetting that, “One important step which we have not been able to achieve in the last term of parliament was reviewing our tax laws. Many of our tax laws are fifteen years old, some are actually twenty,”

“So one of my priorities will be to work with your Parliament to make sure that we give the country new tax laws as the House has collaborated with the ministry of finance to do in the past, particularly in the 1990’s when we implemented many reforms which many African countries have followed and our tax laws back then were the model which many countries in Africa have used. We’ve fallen behind,” he pointed out. Already, the Ghana Revenue Authority (GRA) has earmarked 2015 as the completion period of its modernization and integration plans. It said the next two years are very critical to the GRA for the attainment of the goals set out in the modernization plans. The Institute has raised concerns over the implementation of the tax regime that has a few individuals and organizations paying taxes.

Tax experts believe the Ministry of Finance in consonance with the GRA should focus attention on income related taxes, which are the direct taxes.

According to the President of the Chartered Institute of Taxation, Mike Aflu, Ghana must quickly move into a regime that ensures majority pays taxes.

“We have the income tax, we have the capital gains tax, we have various forms of taxes before we have vat being the indirect tax and over the years, apart from the income tax, most of the other laws like the capital gains tax, the gift tax and others have not really been tested or used.”

He explained that these laws regulating the taxes have not been used because “most of the clauses in there are not really workable. We need to find tune in all these and make sure that they become practicable.”

Mr. Aflu suggested that “it is not a question of taxing more; it’s a question of making sure that there is equity in our tax system so that everybody that is liable to tax must be able to contribute his or her quota.”

The Institute however believes the solid tax background of Seth Tekper if confirmed as Finance Minister will be key to ensuring the reforms are finally executed.

“Seth Terhper, has worked with the International Monetary Fund (IMF), in tax administration, he has also written a tax handbook which covers almost every area of VAT; a very experienced man when it comes to tax. Taxation is the base for revenue mobilization. Without taxation, government revenue cannot be made so we see his competency and his knowledge as something that will be a great asset to this country.” He said.

Comments:
This article has 10 comments, give your comment