A new Afrobarometer report released by the Centre for Democratic Development (CDD) suggests that Ghanaians have endorsed a taxation and are willing to pay higher taxes to support the country’s development. This report comes on the back of the newly introduced taxes by the government.
According to the report, majority of Ghanaians are unaware of the taxes and fees they are required to pay, as well as how the government spends tax revenues.
“The analysis finds that citizens are more supportive of taxation if they believe the government is doing a good job of delivering basic services. But many citizens also express mistrust of tax authorities and see widespread corruption among tax officials,” the study indicated.
Eight out of ten citizens, representing 79% said tax authorities have the right to collect taxes.
The government in its 2021 budget statement introduced new taxes, including a 1% COVID-19 levy, 1% increase in National Health Insurance Levy, and 1% increase in flat VAT rate, as well as a 30 pesewa increase in fuel prices to take care of excess power capacity charges [20 pesewas] and Sanitation and Pollution Levy [10%].
The Ghana Federation of Labour and the Association of Ghana Industries (AGI) had expressed concerns over these taxes.
The AGI fears these taxes may have a huge toll on the business community particularly at a time when players are reeling from the devastating effects of the COVID-19 pandemic.
Other key findings discovered through the Afrobarometer report are as follows
▪ A large majority (72%) are willing to pay more in taxes to help finance the country’s development from domestic resources rather than through external loans (Figure 2).
▪ Citizens who think the government is doing a good job of improving basic health services, addressing educational needs, providing water and sanitation services, maintaining roads and bridges, and providing a reliable supply of electricity are 6-8 percentage points more likely to endorse its right to collect taxes (Figure 3).
▪ But large majorities say it’s difficult to find out what taxes they’re supposed to pay (61%) and how the government uses tax revenues (70%) (Figure 4).
▪ Only four in 10 citizens (39%) say they trust the tax authorities “somewhat” or “a lot.” More than eight in 10 (84%) think at least “some” tax officials are corrupt, including one-third (34%) who think that “most” or “all” are involved in graft.
Source : citibusinessnews
