Government asked to include night traders in domestic tax net
Tax Justice Coalition (TJC), a tax and policy advocacy group, has urged the government to put in place mechanisms to register, educate, and rope in night traders into the tax net.
Date Created : 8/31/2023 12:00:00 AM : Story Author : Francis Ntow/GNA
According to the Coalition, despite a seeming boom in night trade in various markets and streets across the country, and the huge revenue generation potential in night trade, much had not been done to gain taxes from those income earners.
In an interview Mr. Vitus Adaboo Azeem, the Chairman of the Coalition, said it had become necessary for the government to ensure that people in night trade were made to pay taxes.
“There are a lot of businesses that operate only at night, and this happens when the Ghana Revenue Authority (GRA) has closed, which leads to the government losing revenue,” he said.
Mr. Azeem advised GRA to empower and task its officers to identify and register night traders to bring them into the tax net.
“They can be national service persons that you task to go and identify and register them, then decide how to handle them. It may be necessary to start first with a flat rate, and gradually absorb them into the mainstream,” he advised.
Mr. Azeem also said it was important that continuous education and sensitisation was done to have the buy-in of the traders, with the government accounting to the citizens by improving the delivery of essential services.
He explained that the current economic situation, and the high likelihood of the government missing most of the policy objectives in 2023 annual budget and macroeconomic targets, required that aggressive ‘progressive’ tax collection was pursued.
The total Revenue and Grants for the first half of 2023 was GHS59.3 billion (7.4 per cent of Gross Domestic Product, GDP), 8.4 per cent below the target of GHS64.7 billion (8.1 percent of GDP), Mr. Ken Ofori-Atta, the Finance Minister said last month.
Delivering the 2023 mid-year budget review, he indicated that provisional data on government fiscal operations for the first half of 2023 showed a slower pace in expenditure execution relative to revenue shortfall.
This resulted in an overall budget deficit on a commitment basis of GHS6.3 billion (0.8 per cent of GDP), compared to the 2023 first half Budget deficit target of GHS28.3 billion (3.5 percent of GDP), Mr Ofori-Atta said.
Against this background, Mr. Azeem said: “We, therefore, call on the government to strive to tie the collection and payment of taxes to the provision of effective and efficient public services so as to improve on voluntary tax compliance.”
He also urged the government to amend the vehicle tax component to include the accommodation of public officers, noting that accommodation was a ‘benefit in kind’ that ought to be tasked.
Mr. Benedict Doe, a Finance Officer with the Ghana Integrity Initiative (GII), also said it had become necessary for the government to rope those informal traders into the tax net.
He explained that: “These night traders engage in legitimate business and make returns, but quickly leave before the tax man comes to the market, therefore, no traces on them.”
“So, it will be really good that GRA put some mechanisms in place to trace such transactions and then get some taxes for the State,” Mr. Doe said.