The President of the Ghana Union of Traders Association (GUTA), Mr. George Ofori has appealed to government to always consider the plight of local businesses when formulating policies on tax as it is one of the major factors hampering the growth of businesses in the country.
Speaking in an interview Kofi Amponsah, Mr. Ofori, who is also the Fotufohene of Oboo Kwahu in the Eastern region noted that most businesses in the country have failed due to arbitrary increases in taxes by government.
“Excessive taxes will not help, higher taxes makes people run away from paying taxes. The clarion call is little drops of taxes makes a mighty nation as they say. One possible way through which various governments can increase the payment of taxes by all citizens in a country is to reduce taxes and widen the tax net. This will help government raise money from both the formal and informal sector in order to prevent the collapse of local businesses. Little drops of taxes make a mighty nation,” he emphasised.
He stated that the major reason why businesses engage in smuggling is due to higher taxes noting that a favourable tax policy will not only help in the expansion of businesses but compliant and enforcement will be easier.
“Taxes should be affordable for people to pay willingly, when taxes are high people will smuggle goods into the country, Compliant and enforcement becomes a little bit easier for the tax agencies but the moment you think as a government of increasing taxes excessively to get money people try to run away from paying taxes and directly or indirectly you are asking people to smuggle, eventually the taxes that the government would have to maximize goes into people’s pocket, so why don’t you reduce it so that you get enough money for national development,” he stressed.
He called on African leaders to relook at some fundamental issues under pinning businesses in some member states.
He noted “the failure of hamonisation of tariffs within the ECOWAS sub region to curb smuggling and to also help improve manufacturing as they are the hardest hit by the increase in tariffs.”
Manufacturing Industries need water, Energy etc. But how do they survive in these conditions.
He described the situation where most Industries in Ghana are unable to export their products to neighbouring countries as worrying and needs to be addressed urgently.
“Is Akosombo Textiles able to export its products freely to other countries without trade barriers? Do we have a common currency for trading unlike the advanced countries where some of them use the Euro and the dollar? The other countries are protecting their industries to enable the youth get employment. Harmonization is therefore defeated,” he quizzed.
According to him, GUTA and officials of the Domestic tax Division of the Ghana Revenue Authority have agreed that members pay the 3.5% flat rate until a final decision is reached by both parties in their next meeting following an earlier cancelation by government to force all their members to pay the standard rate of 17.5%
Mr. Ofori also indicated the country has been plunged into corruption due to poor policies by government resulting in untold hardships.
He added “Government policies have made people corrupt.You are given it out with the left hand and taken it with the right hand. People living in the country now are living in an expensive situation. Government own policies in terms of salary structure have made people corrupt. Nobody in Ghana can live with GhC300 or GhC 500.00 a month so everybody will like to cut corners that has resulted in corruption practices that the country is experiencing. Some Policies have also made people uncomfortable and often times do not want to go on retirement because of hardships."
Source: Kofi Amponsah
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