A tax expert, Dr. Isaac Nyame has averred that implementation of tax policies without enforcing its laws cannot yield any results.
As provided by law, he insisted that the Ghana Revenue Authority (GRA) must take the needed steps to punish all individuals who do not perform their civic responsibilities by evading tax payments.
“At the bottom of all these things is the enforcement of the penalty regime. Taxation without enforcement cannot work.
“It is very clear in the law that people are supposed to comply with the law and when they fail to do that the GRA has to put everything together and take hold of them.”
Dr. Isaac Nyame
During an interview, Dr. Nyame noted that, if GRA has not granted one a tax relief, then there’s no reason for one to stop paying tax.
“The tax law, when it gives some kind of incentive, it identifies the areas that it wants to incentivize. So, if the incentive is not available, there’s no point in taking advantage as far as the law is concerned.”
Dr. Isaac Nyame
Speaking on the attitude of taxpayers, Dr. Nyame stated that, for the past years, it has been abysmal although several governments have made efforts to control taxpayer-attitudes.
“The culture for tax compliance in Ghana is abysmally low. Various reasons account for this, but the average person doesn’t want to pay tax, which is quite disturbing.
“The culture is not good over the years. If I remember, as far back after the economic recovery program in this country, various administrations have come to try and encourage tax payment but the attitude towards have not been too good.”
Dr. Isaac Nyame
According to the tax expert, some taxpayers have the impression that, while they put substantial efforts to adhere to tax laws, others decidedly fail to comply.
“First and foremost, people want to just remain outside the tax bracket, in other words the tax net. They don’t want to come because they feel that when they come into the tax next, it seems like not everybody is paying.”
Dr. Isaac Nyame
Tax payment is a legal requirement
Dr. Isaac Nyame also emphasized that tax is a legal obligation, therefore, must be adhered to by all taxpayers irrespective of their professions.
Also, he explained that the law specifies the kind of income or expenditure that should be taxed.
“Tax is the creation of law and the law is very clear as to who the tax payers should be, what sort of income should be taxed and what sort of expenditure should be taxed.”
Dr. Isaac Nyame
Dr. Nyame further elaborated that there are three forms of income which are subject to tax: the income from business, investment and employment.
Under the income from business, he outlined that lawyers, tailor and mechanics are all components of it.
Meanwhile, the Tax Expert indicated that it is easy to collect indirect taxes as compared to direct taxes. Unlike direct taxes, he noted that people pay indirect taxes without even realizing.
“It is fairly simple to manage with the indirect taxes because it is more of an expenditure tax. Because you go and buy the thing and nobody gives you a bill for tax separately. People buy water, they would have paid tax without noticing.”
Dr. Isaac Nyame
Aside employees whose taxes are deducted right from their salaries, Dr. Nyame said it is very challenging when it comes to direct collection.
“But when it comes to the direct tax, that’s where the problem is. Apart from employees whose taxes are exacted right from the time of payment by the employers, it is not so easy to collect direct tax.”
Dr. Isaac Nyame
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