The Ministry of Finance and Economic Planning, Dr. Kwabena Duffuor, has proposed to the Cabinet to offer tax amnesty to delinquent individuals and enterprises that have not honoured their taxes in previous years, without attracting penalties or prosecutions. The move, likely to be featured in the 2012 budget, is expected to encourage defaulting taxpayers to start honouring their obligations from a regularised clean slate, while allowing businesses operating in the informal sector to bring their operations under public watch. A source close to the Ministry of Finance and Economic Planning’s budget drafting team said if the proposals were accepted, the government would be committed to the process and would not use the exercise to prosecute any delinquent taxpayer. “People who think they could be punished should understand that the policy will not be implemented with that in mind. The aim is to give all defaulting taxpayers, including those who have gone on break and others who have been evading tax, to take advantage of this one-time exercise to honour their tax obligations to the state,” the source said. When implemented, the moratorium is expected to run from January 2 to September 30, 2012. According to the source, the exercise would be an honest and transparent one that should encourage all who fall within the tax bracket to take advantage of the amnesty to pay their accumulated taxes, under-invoicing or under-declarations without attracting the sanctions associated with such serious offences. The government in 2006 granted a similar tax amnesty to individuals and companies that had defaulted in paying their taxes to take advantage to regularise their records and have their tax evasion penalties forgiven. However, many feared the government could use it to penalise them and therefore the exercise was not very successful. In that year, the amnesty was from January 1 to June 30 and it was a waiver of the penalties and sanctions for self disclosures of tax evasion or avoidance, false and wrong declaration on taxable activities/services or dutiable goods. The same leverage is being given next year. “This time the government wants to be very honest and sincere without any iota of deceit in this moratorium. After this window, a task force would go out in search of tax evaders and if found culpable, the victims will face the full rigours of the law,” the source told the Daily Graphic in Accra. This amnesty comes at a time when the government, through the Government programme, is automating both the Registrar General's Department and the Ghana Revenue Authority (GRA). The automation would pave the way for all business concerns in the country to reregister their businesses and business names, while every individual and companies would be required to acquire a new Tax Identification Number (TIN). The move is expected to increase tax revenues for the government in the wake of rising public expenditure, as against a shrinking tax to Gross Domestic Product ratio, mainly as a result of the expanding economy. The country's rebased GDP, which categorised the economy into the lower middle income bracket, has brought to the fore the need to scale up domestic revenue collection to match the size of the expanded economy. When it comes into force, all individuals and corporate bodies that see any default in their operations would disclose them, formalise their operations and start their tax payments on a clean slate.