Tax can be defined as a compulsory levy on goods and services and on the incomes of individuals and organisations in a country. This has always been the generally accepted definition of tax world over. But I dare to define tax as :
A social agreement between a government, it’s citizens and expatriates to make good a portion of their incomes to government directly or indirectly with the hope of government executing it’s functions effectively and to help develop the social and economic infrastructure of the country in an environment of peace and stability. (Quayson Quotes)
Taxes in every country are the major source of government revenue. It is a source of public finance, which is the source and application of government revenue and taxes is part of such revenues. Other revenue which forms part of public finance includes fees, fines, levies, lottery earnings etc. But among many of such public finance, taxes takes the lead.
Without taxes the Finance Minister cannot fully finance Ghana’s budget as it would have had a very huge deficit though we get other revenues in the form of foreign exchange from sale of natural resources such cocoa, timber, bauxite, gold, diamond, timber etc. But in all this the tax component in the budget is the major source of finance to the country.
It is a sure source of revenue as people are buying, selling and working everyday. The collections are assured and the inflows dependable unlike the world market that we always have to depend on the forces of demand and supply. The only problem is widening the tax net so many Ghanaians can be in the bracket to pay tax. It would appear that many people are evading taxes in Ghana as the system of collection itself is porous. Undoubtedly much work needs to be done in this area.
Without taxes many countries and continents would never have seen development. From the days of the Roman Empire, Babylonian Empire and Egypt civilisation, taxes have been a bedrock and a great source of wealth for any system of governance.
Taxes is basically what is used to run government machinery meaning running the day to day activities of government by way of operations at the same time infrastructural development.
Almost all government workers are paid from taxes apart from those in government enterprises that are autonomous. The security service which includes Police, Ghana Army, The Navy etc are all paid with tax money. All those that run the offices of the president, ministries, districts, municipalities, government agencies are all paid with taxpayer’s money.
In this light you can appreciate how the government would have been “hot” in the absence of tax revenue to run it’s operations. The president of Ghana is paid with tax money so are his ministers, his vice and all those in the judicial service etc. In other words the three arms of government are catered for with tax payer’s money.
Not only that, all those afore mentioned have their infrastructure and running cost taken care of also by tax money. Their cost of maintenance and general administration of their various outfits including their buildings, fuelling of office vehicles, stationery etc at these quarters are done with tax payers money. This government machinery represent cost centers and do not generate revenue for the state in anyway. This means that if the government machinery is not working effectively including those at the ministries, judicial service, parliamentarians and office of the president etc to benefit the tax payer then we are loosing big time our tax revenues as an economy.
You get to the ministries at times and people are working lotto, some arrive to their desk around 10am to 12 pm almost break time, they sit for 2 to 3 hours, chat and make noise and their off to the house. At the end of the month government will use tax payer’s money to give them as salaries. This is why everyone wants to work at the ministries, alot are paid for doing absolutely nothing.
The honourable member will not sometimes turn up at Parliament to contribute towards proceedings in the house to the betterment of Ghana but at month end must be paid with tax payer’s money.
The travelling expenses and per diems of the president, ministers of state and government officials are all borne by the tax payer’s money.
Hosting foreign delegates in this country, their hotel bills, food and entertainment is all borne at the expenses of the tax payer.
All ministers of state including the president enjoy certain facilities such as transport, fuel, accommodation, utilities, house helps, garden boy, gardener, security and even food for free. It is not for free because these expenses must be paid for using the tax payer’s money on behalf of these people by the government to give them a comfortable life so they can run the country well for us. But are all these government officials doing what they are suppose to do so the ordinary plantain seller who pays tax can also have a comfortable life for herself and her children?
You can see how that the whole government machinery benefits from taxes paid by the ordinary Ghanaian. My question however is what benefit is the taxpayer getting for spending his money to pay taxes? Once you buy anything on the market you pay tax, you pay utility, there is tax component. If you work for a Company you pay tax. You use the road you pay tax, you make a call you pay tax, you establish a small business, you pay tax. You try to acquire property you end up paying tax. You export or import a product you must equally pay tax. You buy fuel, you pay tax. You pay your children’s fees there is tax element. You board public transport you pay tax, you employ the services of either a professional or an artisan, you pay tax to them. One person dealing in an economy can pay more than twenty different taxes at a time.
All the tax payer is demanding for is economic development and growth which should be made possible by the whole government machinery but what do we see these days? Government would use tax payer’s money for their business neglecting the need of the common tax payer.
Taxes is not a bad thing per say because it is with this that a country can be run and developed. Even our Lord Jesus Christ paid taxes to Ceasar and admonished his followers to do same. It is the civic and moral responsibility of every Ghanaian to pay taxes just as it is the constitutional rights of government to collect them.
Taxes comes in directly or indirectly to the government. Direct taxes are those levied directly on incomes of earners (Individuals and Companies) such as PAYE (Pay As You Go) and Corporate taxes which are on profits of Companies. All these are classified as Income Tax. We also have the Indirect taxes which are levied on goods and services. Such taxes include VAT, Import Tax, Excise Duty etc.
It is the sole responsibility of the government to collect taxes for the state and use it to foster the developmental agenda of the country and to run the daily operations of the country.
In Ghana today, some few institutions are empowered to collect taxes which comes in different forms. These institutions include Ghana Revenue Authority, Metropolitan Assemblies, Ghana Highway Authority etc.
A country without taxes is a country without development. The difference between developed and under developed countries however is not the non exitence of tax itself but the use of these taxes.
Whiles others have seen tax as a model of development others have seen it as an avenue of corruption – loot and share.
It is therefore imperative we don’t just look at tax as a revenue only but stringent effort must be put in place to ensure judicious use of these tax revenue.
Recently there has been a brouhaha of even drawing the clergy into the tax net which I concur because the church makes use of social amenities and some are into trading in their churches by selling church sourveniers to members for money. Many churches also run hospitals and schools which are income generating ventures and must all be taxed. I am of the view that the church is also an entity that deals in money and must pay taxes on them. My point exactly is everywhere and every place where there is exchange of money for goods or services or for any other purpose, tax must be paid. This is something that GRA seriously needs to take up to ensure that the country has internally generated funds to run it affairs than borrowing at huge interest rates from IMF or world or better still depend on donor support to fund our budgets.
That said the object of this article is to look at the infrastructural development of Ghana looking at how much the ordinary tax payer pays. If you carefully analyse my earlier definition of tax, it is more of an agreement for government to take people’s money and in turn give the people back development.
Tax money is not for the purpose of corruption where one greedy public official will use his signature to be syphoning the tax payer’s money.
The tax payer needs good roads, good drinking water, good drainage system, good transport system by air, sea and land. Shoddy works done on our roads is not a good thing to write home about by these contractors because the government official will not use the full funds allocated for that particular road so the contractor will also provide sub-standard roads for the vehicles of these same tax payers to commute which causes wear and tear and eventually break down of their vehicles. The tax payer deserves better in Ghana.
Our railway system must be brought up to standard so traders can commute their wares from the rural areas to the urban centers for commerce.
Our airline must be brought up to international standards so we can have the ordinary Ghanaian fly in and out of the country at less cost whiles the monies they pay still circulates in the country instead of paying to foreign airlines who will expatriate all the revenues they make.
Our educational institutions must be well equipped and teachers paid well so they can educate the children to meet the challenges of today and the future. Our school kids must be trained up to international standards so Ghana can compete knowledge wise globally.
We need improvement in our healthcare system so the average Ghanaian can assess the system with ease. The NHIS is a good initiative but does not cover alot of treatments and drugs. We want the government to use the tax it collects to improve the system to cover all manner of drugs and expensive surgery. The government must establish more hospitals both in the cities and rural areas.
We as Ghanaians need social interventions that will make us comfortable in our own land so we don’t travel abroad to look for daily bread amidst all the maltreatments we get in foreign lands.
We want the government to invest in our trade and industry and empower the private sector to boost employment in the economy.
Recently when the Finance Minister came up with various tax rates and how it is calculated, that is all the talks were about but as to how these taxes to be collected will be used no one really debated the matter.
Ghanaians must demand accountability on how tax collected are to be used and not just it’s calculations. I see the government making franctic effort to make tax calculation very simple so the ordinary businessman or woman would not have problem in calculating it and filing their returns. This is good, but I will also urge government to be accountable to us Ghanaians on the taxes that they collect.
Why do we have so much filth in the city when AMA is always chasing traders to collect taxes? Why do we have pot holes on our roads yet the government is collecting road tolls on our roads every single day? To me this is very unfair.
Use the taxes you collect not just to pay yourselves as government people but let the ordinary tax payer benefit from what you collect by developing the country for us for God sake.
I believe just as we have tax collection organisations in the country we must equally have institutions that will ensure tax revenues are accounted for in terms of usage.
The current Auditor General is doing a fantastic job by auditing most of the public institutions but I will urge it not only to look at books but also inspect projects that these tax monies were used for. May be we should have a Commission responsible for tax accountability in the country apart from the Auditor General to beef up the checks and balances in the system.
I believe that apart from institutional intervention to ensure that taxes are accounted for, the best accountability every Ghanaian can easily read, see and understand as a report is economic development and growth. The best tax accountability is massive infrastructural development which will make life easier for the ordinary Ghanaian like good schools, roads, healthcare, transport system, industrial development etc which will be run effectively at less cost to everyone so we can all benefit.
I urge the government not to be just interested in tax reforms, collections and expanding the tax net but also be interested in tax accountability to Ghanaians as well. Development in a country is an evidence of tax use and it is the best accountability every Ghanaian wants including me. Once we are paying taxes and you come and tell me all go to government expenses but I don’t see development in the country then obviously we have a problem somewhere.