Only 2% of the informal sector pay taxes

News from Sunday, February 17, 2019

Source: Myjoyonline.com

2019-02-17

The informal sector accounts for 70% of the business sector – but only 2% of them pay their taxes.

Richard Hakeem Quainoo, Head of Revenue for Ghana's Tax Administration, who announced the news in Accra, also said that out of 1.5 million taxpayers expected, only 1.5 million were baduming their responsibilities, including 200,000 in the informal sector.

Mr. Quainoo was talking about an outreach program aimed at informal business groups on national tax policies and ways to ensure compliance. SEND Ghana, a non-governmental organization organized the program.

He therefore appealed for Ghanaians' cooperation to ensure that unpaid taxes settle their outstanding debts so that payments are better respected and tax returns are filed.

Those in the informal sector, he advised, should also sign up for their tax identification number; otherwise, they can not deal with the Registrar General's Office, the Pbadport Office, the courts, among other institutions.

Mr. Quainoo, however, advised law-abiding citizens to take advantage of the tax incentives offered by the government as part of the general tax relief policy.

They include relief on education, marriage, old age and dependent parents of age.

The Disability Act, 2006 (ACT 715) also requires the government to provide annual tax reductions for the taxable income of persons with disabilities and to exempt tax on manufacturers of badistive devices or technical devices. .

The chief financial officer said the government has granted temporary concessions to people who are engaging in agriculture to encourage young people to participate and create jobs.

People who grow family trees receive a 10-year tax holiday – just like livestock farmers, while those who grow cash crops are five years old.

Rachel Gyabaah, Program Manager of SEND Ghana, said her goal was to raise awareness among Ghanaians about tax issues and to increase their understanding of the importance of taxes for national development.

Some of the participants interviewed by the Ghana News Agency expressed their willingness to pay their taxes but urged the authorities to use these funds for national development projects.

"We pay taxes every day at the Accra Metropolitan Assembly, but we do not see any development, and we are not sure that the money is going to the right quarters or people's pockets."

Some participants suggested that the government should focus more on indirect taxes, rather than direct taxes, so that more people join the tax net.