Business24 Editorial: Deepening tax net unacceptable

There is no denying that the coronavirus pandemic has rendered the country needing more revenues to bridge its yawning fiscal deficit. And as is the usual approach almost every time the country is cash-strapped the attention has to be put on the low-hanging fruits, the formal sector.

Meanwhile, the informal sector provides a means of livelihood for the vast majority of Ghanaians. The Ghana Statistical Service (GSS) pegs that figure to about 80 percent of the active workforce.

While the sector is very crucial to providing jobs that support the economy, over the years their tax contribution has been abysmally low.

Many regimes have not made the adequate effort to rope in this all too important sector into the formal economy and get them to pay what is due to the state.

Very often the refrain has been about how difficult and costly it is for tax administrators to go after these businesses especially due to the lack of a proper addressing system among others.

Thanks to technology some of these inhibiting factors are becoming obsolete by the day. Nevertheless, the innovativeness of the tax collectors must be on full display if they are to make anything out of the abundance of technology.

In addition to mobile money which has been a real gamechanger, this government very much touts its digital addressing system which at the very least should contribute to providing geolocations to some of these hard-to-reach businesses.

For more than a decade that mobile money has been in existence, it has been an instant success. It is disappointing that the country’s tax policies have not been tweaked to take advantage of mobile money and allow people to file their returns with that technology.

While this paper believes that widening the tax net is a very difficult thing to do, it is worth noting that the country needs to, at least, start from somewhere.