Vice President Dr. Mahamudu Bawumia
Following the decision to roll out what has come to be known and accepted as the Revenue Assurance and Compliance Enforcement (RACE), the government is set to get more people to pay taxes.
Speaking at the inauguration in Accra yesterday, Vice President Dr. Mahamudu Bawumia said “my understanding is that the key strategies that are being rolled out will target those major potential tax payers who are now non-tax compliant.”
The effectiveness of the RACE Initiative, according to him, “depends on the ability to leverage on technology and to integrate the rich databases from the Ghana Card, the TIN, Digital Address System, Passport and DVLA databases amongst others.”
It is therefore the expectation of the Vice President that RACE will power the efforts of government to stay the course in terms of its economic targets and to return the economy to a path of fiscal sustainability by 2024.
As government strives to create a conducive environment to simplify the tax assessment and reduce the cost of compliance to tax payers, Dr. Bawumia indicated that “there is also a greater burden on the tax authorities in how to simplify enforcement and compliance at the last mile at the retail and micro enterprises.”
That group, he said, included most of the country’s traders, and the artisans in the informal sector, and added that these categories of potential tax payers are however, outside the scope of RACE.
For these groups of citizens, the Vice President insisted “the issue is not with their tax evasion or tax avoidance. And their non-compliance may have more to do with their tax education and how assessment and collection are enforced.”
He, therefore, stressed the need to find simpler ways to encourage tax compliance at this basic level.
“We also realised that the education as well as the nature of the businesses of operators in the informal sector results in poor record keeping. Asking such businesses to provide records for the last three or four years for an audit is an exercise in futility and will be perceived as harassment,” he emphasised.
He, thus, called for simplification of their income or profit tax assessment, saying “one option is the use of a flat tax regime under a modified taxation system to cover micro and small enterprises which should cover many in the informal sector.”
“For medium-sized enterprises, there could be the option to submit to conventional tax assessment at the corporate tax rate or opt for a flat tax based on turnover under a modified taxation system. For the micro and small enterprises, we must leverage on technology to simplify the collection and payment of the 3 per cent flat tax,” he noted.
That, he said, was because there is a notion that “a simplified flat tax will allow more people at the retail level to better assess their tax obligations and make payments without too much human interface and a rigorous auditing system.”
Commissioner General of the Ghana Revenue Authority, Reverend Ammishaddai Owusu-Amoah, described the RACE initiative as a right intervention to help generate revenue and stressed the need for effective measures in collection of taxes to block the many leakages in the system.
Members of the Steering Committee of RACE include the Director, Revenue Policy Division, Ministry of Finance, George Winful; Senior Technical Advisor of the Minister, Ernest Akore; Deputy National Security Coordinator, Edward Kwaku Asomani; Deputy Director, National Intelligence Bureau, Nana Attorbrah Quaicoe and the Audit Transformation Advisor, GRA, Charles Owusu.
They are expected to identify and eliminate revenue leakages while reinforcing the culture of compliance, especially in areas such as petroleum bunkering, gold and minerals export, port operations, transit goods, warehousing, and free zones operations.
By Charles Takyi-Boadu