Graphic Business News

Firms to be ranked on tax compliance

By: Maclean Kwofi
Category:
Dr Alex Ampaabeng
Dr Alex Ampaabeng

A non-governmental organisation (NGO), Oxfam Ghana, is to introduce an initiative to rank companies based on their tax compliance in the country.

To be named Ghana Responsible Tax Index (GRTI), the initiative is designed to help improve domestic revenue mobilisation (DRM) to support ‘Ghana Beyond Aid’ and encourage companies to honour their tax obligations.

GRTI is to set principles for companies to adopt and subsequently rank them based on their level of disclosure of tax practices and how those were embedded in their overall corporate social responsibility agenda.

A Fiscal Policy Specialist of Oxfam, Dr Alex Ampaabeng, who disclosed this to the GRAPHIC BUSINESS after a day’s forum by Oxfam in Ghana at the weekend in Accra, observed that the GRTI was expected to be launched in October this year.

It was on the topic: ‘Ghana Tax Dialogue—How Should a Fair Tax System Look Like?’

“We will be engaging the key stakeholders within the Ghana tax system on a dialogue table to see ways of improving fair tax practices and improving domestic resource mobilisation in the country,” Dr Ampaabeng added.

He observed that as part of the broader Active Citizenship and Accountable Governance programme, Oxfam was currently undertaking a project called Ghana Tax Dialogue.

He stated that currently, the project was being piloted in Ghana and Kenya, the only two African countries, having been successful in Denmark since its inception in 2014.

He said the programme intended to promote good corporate tax practices, mainly tax transparency and tax responsibility, adding that it also intended to encourage corporations to disclose their tax practices, payments and incentives received.

He added that the project was also aimed at contributing towards promoting effective tax administration in Ghana by engaging the tax authority on policies for responsive and efficient tax administration for a fair tax system in the country.

Tax obligation
Dr Ampaabeng appealed to Ghanaians to honour their tax obligations to ensure the rapid development of the country.

He said it was only when taxes were paid promptly that the government would be able to provide the needed infrastructure such as good roads, hospitals and other social amenities.

Dr Ampaabeng said Oxfam as an organisation was committed to promoting the welfare of the poor and vulnerable in society by advocating increased spending.

SME sector
A Partner of ASL Consulting, Mr Eric Dontoh, asked businesses in the small and medium enterprise (SME) sector to invest in strong storage systems that would allow for easy retrieval of documents to avoid incurring extra tax obligations.

He explained that most businesses often incurred extra cost after filing their tax returns due to poor record keeping from them and the Ghana Revenue Authority (GRA).

While urging the GRA to take steps to address its poor maintenance of client files, he said businesses also needed to keep proper records of their day-to-day transactions to enable them to know their expenses and the right taxes to pay to the State.

“Companies file returns annually and make payment on account quarterly. Poor maintenance of client file by the GRA leads to loss of valuable document already filed with the GRA.

“The GRA later argues with the client with regard to the filing of these same documents that have been filed already, sometimes imposing penalties as though it was the fault of the client that the document went missing.

“This, however, places a burden on the taxpayer to invest in storage systems that allow for easy retrieval of documents,” he said.