The Commissioner-General of the Ghana Revenue Authority, Julie Essiam, says effective revenue mobilisation cannot continue for the longer term without deliberate efforts to include the informal sector in the tax bracket.
According to her, several debates and discussions centred on taxation in Ghana have always observed a gap as far as taxing the informal sector is concerned, which needs to be tackled.
“It has become evident that it is no longer sustainable to continue with our mandate without widening the tax net to include the informal sector.”
“Whether it is a debate on taxation in Ghana, a newspaper article, or an economic discussion one way or another, it always comes back to the same question: how will the GRA rope in the informal sector?”
“The voices are loud and are getting even louder and louder; the GRA cannot continue to ignore the debate on the informal sector,” she said.
Madam Julie Essiam, who was the keynote speaker at the Society of Women in Taxation (SWIT) Ghana 2nd annual conference, however stated that although there is a need for the inclusion of the informal sector, it requires a multifaceted approach given the primary role the sector plays in poverty reduction.
“The sector remains a very key economic factor, not only in taxation but also in its contribution to poverty alleviation. Taxing this sector is a multifaceted issue that entails careful consideration of policy, compliance, and economic impact.”
She prescribed a simplified approach to taxation in the informal sector to reduce the overdependence on the formal sector. This, she believes, will facilitate adoption among informal sector players and provide the government with a reliable source of revenue.
“Having a convenient means of taxing the informal sector provides a credible source of sustainable revenue mobilisation and, for that matter, puts a needed limitation on us (GRA) from the unsustainable continuous reliance on our current limited tax net, which most of the time is the CIT.”
To this end, the Commissioner-General disclosed that GRA over the period has been charting out strategies for taxing the informal sector, adding that “this year in particular we are making very bold steps in consolidating all our efforts towards the optimisation of taxation in the informal sector.”
She mentioned the rollout of an accelerated strategy for the full implementation of government taxation policy, which embodies the formalisation of the informal sector.
She also praised the collaboration with SWIT in educating and sensitising women in the informal sector as positively increasing compliance in the sector and urged the deepening of the partnership.
Madam Essiam also revealed fresh collaborations by the GRA with faith-based organisations to bridge the divide between tax collection in the formal and informal sector.
Additionally, she highlighted the pivotal role of women in economic development, citing an OECD report that stated that Africa has the highest percentage of women entrepreneurs in the world, including women in the informal sector.
This makes women important stakeholders in discourses aimed at driving economic change, according to her.
“Our contribution to tax policy, administration, and compliance is not only shaping the economic and social landscape of our great nation but is also laying the foundation for a more equitable and efficient tax system that has the potential to not only shape our future but, most importantly, the future of our generation,” she told the women tax professionals.
The conference, chaired by Chartered Institute of Taxation Ghana President, Mr. George Kwatia, was under the theme “Taxing the Informal Sector: Policy, Compliance, and Impact on the Economy.”
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