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A tax expert says government's drive to expand the tax net in order to rake in more revenue would be defeated, if revenue officials take delight in closing down defaulting firms.
Abdallah Ali-Nakyea told Joy FM's Super Morning Show on Wednesday that the revenue agency would ironically lose revenue to shore up their basket because the companies would not be working for the period they were locked out of business.
"If you lock up the place, business does not go on, he doesn't earn the money, you taxes remained unpaid...locking up the place should be the last resort...the idea is to recoup what you are losing by way of tax revenue and not to put them out of business."
Instead of closing down the companies, Mr Ali-Nakyea suggested garnishing the person's account or getting another person who owns the tax debtor to pay over to the revenue agency.
His suggestion comes on the back of the launch of the Round 5 Afrobarometrer by the Ghana Center for Democratic Development (CDD-Ghana). According to the latest survey, a high percentage of Ghanaians (about 84%) are willing to pay their taxes but the compliance level was very low.
Mr Ali-Nakyea said transparency, when it comes to tax, is key, and government can whip public interest if it publishes what the taxes people pay are used for. He was confident once people know that they are being used for their own benefit, the will not be reluctant to pay their taxes.
Mr Ali-Nakyea, who is the Managing Consultant of WTS Nakyea & Adebiyi, a firm of Tax Attorneys & Solicitors in Accra, said government has over the years not been able to manage tax revenue well to the satisfaction of the taxpayers. Using road toll as a case in point, he said road users will not comply with the law if they pay their tax only to drive on unmotorable roads.
He also advised the revenue agencies to set up offices close to business centres and localities of tax payers. Their offices should also be opened to tax payers to come to them with their problems and concerns.
"We need to get the revenue administration very close to the tax payers, it shouldn't be a hide and seek game. Can we be more accommodative for the tax payer to walk to us and tell us I have these challenges with my records; what am I to do?"
He warned against the practice were the collection agency is seen as hounding the tax payer. They should be encouraged to voluntarily pay their taxes instead of adopting the force approach to ensure compliance, he added.
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