September 18, 2020

Mid-year Budget Review: Expand tax net to boost revenue – GUTA to Gov’t

The President of the Ghana Union of Traders, GUTA, Dr. Joseph Obeng, wants Government to use the Mid-year budget review as an opportunity to widen the country’s tax net to capture many more businesses to boost revenue generation.

The emergence of the Coronavirus Covid-19 disease, has disrupted trading globally, and Ghana is no exception. From the closure of borders to the change in consumer behavior and spending, members of the Ghana Union of Traders Association, also saw a drop in revenue.

They have also experienced a shortage of products largely due to the closure of borders and reduced importation caused by a slowdown in production from major import destinations such as China.

President of GUTA, Dr. Joseph Obeng, told Citi Business News the high cost of credit affects their operations, hence the need for government to come out with a strategy to make access to credit easier and cheaper especially as businesses seek to bounce back from the impact of COVID-19.

“This time it is very difficult to get credit from some of our foreign suppliers because of the obvious. They are also very handicap, they are not able to meet their own financial requirements. And any fund that government is bringing in the form of a stimulus package shouldn’t just be disbursed to people, but rather it should be used to setup a parallel fund or alternative bank for us, to source affordable credit. That by itself will compel the main stream banks to reduce their interest rate, otherwise, we’ll just be dancing around the problem” he observed.

In a country where nearly 90 percent of businesses operate in the informal sector, Dr. Joseph Obeng wants government to widen the tax net to capture more people in the informal sector to boost revenue generation.

He says this is necessary to lessen the tax burden on a few businesses captured by the Ghana Revenue Authority.

“We also appeal to government to expand the tax net. The tax net as a structure now is not open, it is just being recycled among the few people who have already been captured by the tax system and so every time government needs money it just comes to increase the taxes and it doesn’t help.”

“We need government to re-look at this and simplify the system especially for the informal sector where a great majority of us are not captured into the tax net. The tax stamp policy should therefore be enhanced and then broadened so that it can capture all aspects of trading in every geographical area,” he said.

Source: Business