Dear His Excellency, Happy New Year.
This is my second letter to you since becoming president of our motherland, Ghana. It turns out to be my New Year wish to you. My first letter was titled: “An open letter to the President of Ghana on safety and matters arising”. As I indicated, it would be a regular feature from me on matters of national interest.
Through Biblical beliefs to ancient philosophies, the payment of tax was always a command imposed on the citizens. Any form of non-compliance by the populace came with its consequence. The “social good” of tax collection cannot be over emphasized.
The Ghana Revenue Authority (GRA) in collaboration with National Commission on Civic Education (NCCE) has rolled out tax educational campaigns called “ Our Taxes –Our Future” across the country over the need of the citizenry to honour their tax obligations. I must say the involvement of NCCE has widened the tax educational program level of education especially, amongst the informal bracket.
Your government is introducing innovative ways of payment methods using Information technology tools and policies to drive the strategy as seen in the Tax Amnesty Bill which has just been passed by the Legislature arm of government.
Often, those in the formal sector feel targeted by government tax policies. The reason is simple: by default, Tax Deducted at Source (TDS). It was reported in 2014 that only Two million Ghanaians paid tax out of eligible six Million taxpayers. In this wise, every effort to widen the tax net by your government should aggressively be pursued and supported by all.
Information available on tax revenue generation by the Ashanti Region, the second largest regional economy, points to a contribution of only 4 Percent to the national tax revenue generation. As published by the media, it came as a shock to the Commissioner General of Ghana Revenue Authority.
We go on tax education and compliance and further reiterate the immense benefits society derives from the payment of tax. We explain out to our traders in the informal sectors that these same taxes are used for social good like road network, portable water and electricity network. Again, the collection of tax is also used in supporting programs such as Free Education and National Health Insurance Scheme (NHIS) amongst others
On one such occasion on tax education and compliance, a market woman retorted loudly in the local language“ does the president pay his income tax? , answer me” she yelled back again “go and tell the president to pay his income tax and I will pay!”
At this point, I attempted to explain out the constitutional provision but she disarmed me. I know that per the Income Tax 2015 (Act 896), the salary, allowance, facilities, pension and gratuity of the President in accordance with Article 68(5) of the Constitution are exempted from tax.
As at the reading of the 2018 budget by the Finance Minister, Mr Ken-Ofori Atta, the total revenue and grants for the period fell short of target by 9.3 percent. The 2018 Budget however estimated government plan of raising some GH¢51 billion from revenue and grants for 2018.
The PriceWaterHouse Coopers (PWC) in its post 2018 budget analysis expressed great worry about how government was going to raise the entire amount and suggested unless government intensified tax compliance measures.
Fact is, there are a number of the Ghanaians who hold the view that if there is no equity and fairness in the income tax payment system, they will not honour their tax obligations. This concern, call it feedback, needs to be addressed in a pragmatic manner if we are to exceed our national tax targets and reach your well publicized vision of a “Ghana Beyond Aid” (GBA).
Sir, following on from a potential tax payer feedback, it is my humble view that any income tax education ought to be situated within the framework of fairness and equity in the Ghanaian tax structure. It is only through this, that the total buy-in of the Ghanaian could be solicited.
The framers of the Ghana’s 1992 constitution as at that time, perhaps meant well. But in my humble view, Sir, it is of no relevance now if we are to attain our shared vision of national development through tax resource mobilization.
The view that people should pay their tax to demand accountability is a valid point but a flawed argument and never sustainable as long as the Number one person of the land never pays his tax.
As a torchbearer of Africa’s Political emancipation, the Ghana Beyond Aid vision resonates within Ghana and catching up with other African countries as the only sustainable means of reaching our goals of economic emancipation as a continent by using internal resources to create the needed infrastructural development and jobs opportunity for the teeming unemployed graduate youth.
I set out to search for African countries that have application of presidents paying their taxes and I was discouraged by the study and I took note. I checked from the United Stated and I was however excited to note that the Commander–In Chief of the land pays his tax on his income and file returns as any ordinary person. By convention all U.S presidents have voluntarily filed their tax returns publicly.
This practice of tax fairness and equity is a model we can emulate as a country if we so much want to develop the culture of tax payment and leadership on the African continent.
The NDC government issued a White Paper accepting and endorsing the recommendation of the Constitutional Review Commission (CRC) report suggesting that the president of the land pays tax on his salaries and emolument. I don’t know if the then president applied himself to the recommendation.
What I didn’t see, however in the CRC report is the “filing of tax returns” clearly stated. As happen elsewhere, I encourage you to go a step further to publicly declare your tax returns as well. This in my view will be a game-changer with a far-reaching positive effect on transparency and accountability on our governance structure and project the country in a positive light as it is a layer to the fight against corruption in the country.
The then presidential candidate of the PPP, Papa Kwasi Ndoum, had said during the presidential race that, if he won the 2016 elections, he would cause a change to the books to enable him pay his income tax. This, only means that the view that the president pays his tax is popular with Ghanaians
The dividends arising out of this symbolic effort are incalculable. A few points that come to mind are, it will serve as encouragement to all to also honour their tax obligations for GRA to exceed their targets, we shall not need foreign donors to always support our National Budget , a situation that makes them call the shot from afar! This, I believe resonates with your Ghana Beyond Aid expression.
Thank you Sir.
The Writer is a National Service Personnel