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Business News of Tuesday, 25 August 2020


Ghanaian SME's to pay taxes online in next term – Dr Bawumia promises

Vice President, Dr. Mahamudu Bawumia Vice President, Dr. Mahamudu Bawumia

Small and Medium Scale (SME’s) businesses in the country will be allowed to file and pay their taxes online should the New Patriotic Party (NPP) be re-elected in the upcoming December polls, Vice President, Dr Bawumia has pledged.

This was contained in the just launched manifesto document of the New Patriotic Party (NPP) ahead of the 2020 general elections.

Addressing a gathering at the launch of the manifesto in Cape Coast on Saturday, Dr Bawumia explained the measure forms part of the NPP’s resolve to sensitize and digitize SME’s in a bid to identify them and educate them on paying taxes.

“We want to introduce regulatory flexibility for MSMEs in their compliance because there’s so much hustle under the current dispensation that we see for many MSMEs in complying with taxation. So, we want to introduce a simplified tax regime for MSMEs with a very flexible one and make sure they can pay their taxes online. So that tax collectors from GRA cannot come in and harass them for non-payment of taxes. In fact, we would totally discourage payment of tax or levies in cash. You will do it on your mobile phone through mobile money,” he disclosed.

He continued; “We’re going to introduce a single business identifier. Just as you have for individuals with a National ID card, you’ll have that for businesses so that across interaction with government, there’s one number. And that can easily be done because when you register a business, there is one number anyway. A business registration number is given so that doesn’t require new registration. We’ll just make sure that is your unique identifier.”

Meanwhile, flagbearer of the National Democratic Congress (NDC), John Dramani Mahama has also promised his administration when elected into office will provide tax reliefs for Small and Medium Scale Enterprises (SMEs).

Mr Mahama said corporate income tax for medium size companies under his next administration will be reduced from the current 25% to 15%.

But a tax analyst has expressed doubt over the feasibility of the pledge made by Mr Mahama.

Despite touting John Mahama’s pledge as laudable,, Timore Francis Boi said the tax reliefs will not be practical to implement due to the current state of the economy.

“It is the doing of it which is the issue. We would love that the informal sector which is mostly made up of the small businesses would be made to pay their actual taxes. The informal sector contributes just about 1% to the total tax revenue so the tax burden is completely imbalanced. So, if he says that for example, he’s going to reduce the tax rate from 25% to 15%, that will be laudable. But the question is can we identify those in the informal sector and allow everybody to pay 15%,” he explained.