The Association of Ghana Industries (AGI) has developed a tax guide for Ghanaian businesses.
The document, 'AGI Guide Ghana's Tax Law' which is a collation of all existing tax laws was developed with the technical support of GTZ, the German Technical Cooperation Agency, and aims to improve transparency in respect of tax obligations and tax laws.
Mr. Tony Oteng-Gyasi, President of AGI disclosed that a finding of the Ghana Business Climate Survey 2007 indicated that most AGI members preferred a system of simplified tax laws and fast resolution of disputes to resorting to the tax courts. "The AGI Guide, presented in normal language as against legal language, makes the tax system easy to understand, easy to apply and easy to comply with," he said.
In recent years, Ghanaian businesses have complained about the negative impact of the country's regime on their operations.
Oteng-Gyasi disclosed that some laws in the tax code are simply unenforceable, such as the gift tax, and which provides that any gift beyond the value of GH¢50 is subject to tax, and this includes material gifts as well as monetary considerations aimed at ensuring the performance or the omission of an act that goes to the benefit of the giver. "This amounts to taxing a bribe, and this is not just unenforceable, but undesirable," he explained.
The AGI have also expressed concern about pre-production taxation, pointing out that taxes on raw materials and other production inputs are inimical to the nation's economic development, at this juncture, and are therefore advocating a system of post- production taxation.
Other challenges include inconsistencies in some laws which distort the workings of the economy such as that which appropriates the UN Florence Convention, which provides for a duty-free importation of text books into the country, whereas local publishers pay duty on their aw materials and other printing inputs that they import, thereby making them less competitive.
Some tax incentives also, as presently constituted in the law, have not worked, including the locational incentives that have failed to draw investments to areas outside the regional capitals.
Oteng-Gyasi observed that without basic infrastructure like roads, electricity, water and labour, tax incentives are meaningless, saying "nothing works in isolation; all factors should complement each other."