by Kwame Appiah Dept. of Economics, Iowa State University Ames,Iowa.
This is a reply to an article "Levying Ghanaians Abroad for Development by Mohammed Affum", which appeared in the Ghanaian Chronicle.
A combination of factors has made it possible for me to reply to the above piece by Mohammed Affum. First midterms are around the corner and man can spare a few days. Second its getting to April and its time for everyone to account to Uncle Sam i.e. compute and pay ones taxes. Let's go back to the second reason. Its tax time in the U.S. and man is pissed of big time. Uncle Sam has taken his share at source and the "Son of Kwaku Adam" is not getting any refund this year. State taxes also have to be paid and all in all, man has paid almost $ 2000.00 as federal and state tax. This piece is not an outlet for me to impress fellow Ghanaians with how much Uncle Sam has taken from me. But to show Mohammed Affum that Ghanaians abroad will not welcome any additional burden on them. There is something known as double taxation and this brilliant idea amount to nothing but that. Now let's take a second look at the figures as presented by Mohammed.
500,000 expatriates, that is on the low side for sure, but lets work with that. Of this number, how many are in a position to pay. About 60 % are not in a position to pay for sure. As one would put it, they are singing "Hark my soul" in "Abrokyire". Some are in to the tenth verse. Others can recite it even in their dreams now. About 30 % can afford to pay and about 10% of these will definitely, but the rest will not be willing to pay. Nobody is willing to pay his or her hard-earned money for somebody to spend as a "freebie". Another problem is the collections of the money. Thousands of Ghanaians are illegal undocumented "guests" of their host countries. The only way to collect from such people is to tax them at the airport "if and when" they decide to come home. They will have to pay based on how long they have been away. The point is many Ghanaians will gladly die in foreign lands than come home and pay any such "returnee" tax. Many are willing to do this without the incentive of any "returnee tax". The examples of Pakistan e.t.c is true, but in those cases as in Egypt, Jordan, e.t.c, the recruitment is done through the government and thus it is very easy to regulate, monitor and tax.
In Ghana, everyone goes his way with no governmental approval. The only time government becomes involved is when there is trouble like the "Agege" and Ivory Coast instances. However, I still concede that the idea is brilliant. Why? Let us look at the 30% who can afford to pay. Assuming that they are all legal residents wherever they happen to be. The government of Ghana can sign a tax treaty with all these countries. That is done and as far as I know the government of the U.S. has tax treaties with some countries, which allow their citizens to be taxed on earned income in the U.S. South Korea and India are but a few examples. Back to my tax problems this April.
For a student earning less than $ 20,000.00 in a year. If I am paying close to $ 2,000.00 in state and federal taxes and half goes to the government of Ghana, another half goes to Uncle Sam for state and federal taxes. I do not lose in anyway, since I would have to pay my taxes no matter to whom. Now lets look at the many Ghanaian professionals the doctors, pilots, professors, consultants, hustlers, (not forgetting the footballers, the boxers, musicians) who earn and pay thousands of dollars, pounds, dutch macks in taxes. That is the untapped goldmine. There will be no double taxation in this case. The individuals pay their normal tax but in this case half comes to the government of Ghana. This will also encourage the professionals to be more interested in probity and accountability on the part of this and other governments in power.