Economic Relief Through Tax Returns

Feature Article Economic Relief Through Tax Returns

Life would have been a little more frugal if there had been an effective tax return policy. However, in Ghana, you, as an individual, employer, or employee, are not as important as your tax contributions.

It’s for this reason the state hasn’t implemented proper measures to make life bearable for its compatriots. Individuals go through the worst-case scenarios to start a business and employ others, but what they get out of it is taxes upon taxes.

The annoying part of it is that those taxes collected aren’t used effectively but are instead siphoned through the back door. What do we see: a poor health system, non-functioning traffic lights, stalled road projects, choked gutters, deplorable road networks, inadequate sporting, and educational facilities, rendering some students to study under trees.

It’s even worse when an average citizen who earns a gross salary like ₵3500, and ₵110 out of it is used as part of his social security contribution, ₵200 for tier two (Provident Fund), and ₵484.00 for income tax. Regardless of this tax, the individual will be taxed again when at the fuel station, shopping mall, etc. And after a year, he may have contributed ₵5,808.00 as annual tax. Multiply this amount by five years and you will arrive at ₵29,040.00, an amount enough to start a side hustle.

However, the truth is, in five years' time, this same individual will not be able to save ₵29,040.00 because of exorbitant home rent, high inflation, family dependency, relationship commitments, and the high cost of living. This is why in certain jurisdictions, the state gives back a percentage of the annual income tax contribution as tax refund to put some economic relief on the faces of individuals and businesses.

There are Africans in the UK and America who rely heavily on tax returns to finance their projects back home. Because of the strong currency (pounds or dollars), within two to three years, you may realize that they’re done with their projects. If you dare, as an individual living in Ghana, unless you go for a loan or mortgage, and even with that, you are scared because you may end up paying double the amount you went in for a loan after amortization in four or twenty years.

Imagine the revenue collecting agency gives back 20% of one’s annual tax contribution as returns. Won’t it provide economic relief and reduce the burden of tax liability? Thus, it’ll be difficult for business owners and individuals to either avoid or evade taxes. And there’s so much economic relief the state benefits from tax returns: revenue collection is made simple, accurate taxation, data collection for government financial policies, auditing, and enforcement, and supporting social programs.