The Private Enterprise Federation (PEF) is warning that the proposed tax court could end up hurting revenue mobilisation rather than aiding compliance.

Speaking on PM Express: Business Edition, CEO of the Federation Nana Osei Bonsu said several examples around the world have shown that tax courts have not been the solution in dealing with compliance.

“A lot businesses in the country don’t appreciation and understand the tax laws, that’s why they are defaulting and it’s not because they don’t want to pay,” he told host George Wiafe.

 Nana Osei Bonsu also maintained that government has to simplify tax laws for most small businesses to easily comply.

Chief Justice Kwasi Anin-Yeboah has announced plans to establish a specialised court to deal with the prosecution of tax issues and other related cases.

This was contained in a letter to the President of the Ghana Bar Association (GBA), dated April 16, 2021.

Justice Kwasi Anin-Yeboah added, this was “based on representation from Ghana Revenue Authority”.

The court according to the Chief justice will be located in Accra and at the Criminal Division of the Court of Appeal within the Supreme Court building.

Court and the fortunes of businesses

The Chief Executive of the Private Enterprise Federation noted that this approach by the GRA will rather end up collapsing a lot of small businesses that are just recovering from COVID-19 shocks.

“What do you gain by shutting down businesses that are struggling as a result of Covid-19,” he said. 

Nana Osei Bonsu also maintained that “rather let’s find ways to assist them to honor their tax obligations.”

“Businesses are committed to keeping their business and ensure that the necessary levies are paid to the state”, he explained.

Proposed increase in utility tariffs

Utility companies are currently proposing an increase in tariffs.

According to them the adjustments are needed to ensure that they continue to “stay in business and deal with the current supply challenges.”

But Nana Osei Bonsu maintained that the utility companies have not done enough to justify an increase.

“I don’t think that lot of businesses and Ghanaians are convinced by the proposals put forward by these companies, when you look at the current waste in the system which they should also work to address.”

He added that the Federation is also working with other partners to provide own source of power for industries and businesses in Ghana.

The Private Enterprise Federation’s objection to the tariff increase is coming on the back of similar concerns raised by the Ghana Association of Employers. The association in a recent statement noted that due to the impact of covid-19 on businesses, they might not be in a position to pay for any increase in utility tariffs. 

The Private sector and COVID-19 stimulus package

The PEF CEO was of the view that despite the several stimulus packages put out by government, there were still a lot of businesses that are not covered and are currently struggling.

He called for a change in approach going forward, whiles working to deal with the high cost of credit to businesses, adding that “the situation calls for more incentives to assist lot of small businesses out there.”

Nana Osei Bonsu revealed that the private sector is committed to assisting government to deal and manage the COVID -19 when it comes to vaccines and the necessary infrastructure.