Tax Invasion Stifles Ghana’s Development

GHANA'S development is undermined by tax invasion, as colossal millions of Ghana cedis are being invaded by some companies and individuals in the country. These tax invaders take advantages of the loop-holes in the country's revenue mobilisation system to steal revenue which could have gone in the provision of basic amenities in the country.

It cannot be denied that there are lapses and leakages in our revenue collection system as well as under invoicing and under declaration at almost all our revenue collection points, e.g. our ports, borders, airport and even our road tolls are not excluded.

We need to understand that these malpractices, lapses and leakages greatly affect our rapid development. How long are we going to depend on foreign partners to development our country?

Internal Generated Fund (IGF) is an important source of generating funds for development. Even though the manner in which revenue is generated in this country may not be the best, one can believe that those in charge of revenue collection are doing their best, despite the numerous challenges facing them.

It has been alleged several times that some staff of GRA connive with individuals and corporate institutions to dupe the country. It is incumbent on the Ghana Revenue Authority (GRA) to make sure that all persons eligible to pay tax in this country fulfill this obligation; and also to undertake effective monitoring of the taxable base of the economy. Studies indicate that in Ghana more than six million individuals and corporations are eligible to pay taxes. However, less than 2.5 million are currently paying taxes to the state. What has happen to the rest?

Recently, in the news companies like Top Industries were found to be evading taxes. A special operations unit headed by the Chief of Staff, Prosper Bani revealed that a number of leading companies were allegedly evading taxes to the extent that the appropriate duties are not paid. However, most of these companies denied any wrong doing.

Daily Graphic published in its Wednesday, June 11, 2014 edition published that undervaluation of imported fruit juices deny the state of revenue. On quote 'the undervaluation of some imported fruit juices into the country is said to be denying the state its needed revenue while affecting the competitiveness of the products of local producers on the market.'

This scenario happens to other products and other industries and not only in the fruit juice sector. 'Tentatively, the government is said to have lost US dollar equivalent of about GHc2.1 million between January and May, this year,' said the paper.

Recently, the Institute of Economic Affairs (IEA), Ghana, has passionately called on the Mahama-led government to speed up efforts to retrieve funds misappropriated through the implementation of the Ghana Youth Employment and Entrepreneurial Development Agency (GYEEDA), Subah Infosolutions, Savannah Accelerated Development Authority (SADA) and other dubious judgment debts to halt the depreciation of the cedi.

Subah Infosolutions Ltd, an IT company, was paid GH¢75 million to monitor and verify the volume of calls generated by telecom companies for tax purposes, and though could not fully carry out its functions, it was paid by the Ghana Revenue Authority (GRA).

The IT company was contracted in 2010 by the GRA to provide telecommunication traffic monitoring and is reported to have been paid a whopping sum of GH¢144 million over the period.

It has emerged that the company was not in position to effectively satisfy the terms of the contract. To effectively track the call volumes, a key term in the contract, the company needed to be plugged into the systems of the telecom companies, but the company failed to do that.

Similarly, the operations of modules under GYEEDA were reportedly tainted with corruption, a bane which President John Dramani Mahama himself described as mass murder, during his recent meeting with the press in January this year.

The government, through the Ministry of Youth and Sports has abrogated all contracts signed with service providers under GYEEDA. However, the Accra-based economic and governance think-tank yelled that donor partners were reluctant to support the country's budget due to the financial malfeasance.

These sordid developments are happening at the time when grants to the country have recorded significant shortfalls in the annals of Ghana. A Senior Economist at the IEA, Dr. John Kwakye, asked: “Who wants to give you his money to pay single spine or subsidies”.

For every nation to develop, it requires individuals and corporate institutions in that country to pay their respective taxes in order to help develop that nation to enhance the welfare of the citizens.

In nutshell, our revenue mobilisation agencies especially Customs Division of the GRA at the Tema Port must exercise the due diligence to stop the wanton leakages of public resources to these greedy tax invaders.