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Business News of Thursday, 19 May 2022


Corruption not an excuse to evade taxes – Expert

Francis Timore Boi Francis Timore Boi

Tax Expert, Francis Timore Boi, has disclosed although corruption, public procurement breaches and inflation of government-led projects are predominant in Ghana, these cannot be used as a basis by the citizenry to evade taxes. 

Per the constitution of Ghana, parliament has the power to impose taxes on the people “and if Members of Parliament (MP) have passed a tax bill you cannot refuse to pay as it is against the law. It is simply against the law to say you won’t pay taxes because of corruption.”

Admitting that most of the revenue generated from taxes ends up being misappropriated, he reiterated, “We cannot use this as an excuse and refuse to pay taxes.” 

Practically, corruption is a disincentive for citizens to pay taxes. Per statistics, cases of corruption in Ghana result are low tax compliance.

Sharing insights into the tax ecosystem in Ghana, Timore Boidisclosed that Ghana focuses on indirect tax as most Ghanaians do not pay income tax. “So, the gov’t says if it can’t collect income taxes, then it will introduce indirect taxes which you cannot dodge. Most of the tax policies in Ghana are heavily weighted towards indirect tax and you cannot avoid them, and that’s how the policy has been structured towards indirect tax,” he told Samuel Eshun on the Happy Morning Show.

The capacity of a country to provide for the welfare and security of its citizens, as well as to develop and consolidate representative democracy, is determined by its ability to raise enough resources. Democracies are not only built on periodic elections, but also on a social contract between governments and citizenry regarding the collection and spending of public revenue.

As in other African countries, public revenues in Ghana depend on taxation. Many and varied factors underpin a country’s ability to collect enough tax revenue from domestic sources. Paramount among these is citizens’ level of compliance, often influenced by the efficiency of the institution responsible for tax administration, the structure and magnitude of tax rates, and the ability and willingness of citizens to pay. These factors call into sharp focus the need for tax reforms.

These reforms notwithstanding, questions remain about the country’s tax system and administration.