The Nzema East/Ellembelle Association of Small Scale Industry (NEASSI) has called on district assemblies to consult Small and Medium Enterprise’s (SME’s) within their locality to make input before the implementation of any fee fixing regime. According to the group, their inclusion in the determination of fees with further enhance their buy-in and to a greater extent support their business growth.
The association pointed out that most times they are not engaged in these processes and that there has not been much education on taxation.
According to the association, the Budget Units at the various Metropolitan, Municipal and District Assemblies (MMDA’s) across the country responsible for all the processes that lead to the final determination and fixing or rating of levies, often carry out these exercises without any input whatsoever, from the citizenry.
The out-collection is done by Revenue Collectors who work under the Finance Unit of the Assembly.
“In Tax Computation; the Ministry of Finance (MOF) determines ceilings for all the various types of levies after a thorough consultation and engagement with relevant stakeholders.
“Based on the ceilings from the MOF, every assembly is expected, to fix its own fee based on factors including the strength of its local economy using guidelines provided” the association noted in a release.
In that regard, the Heritage Ghana Foundation of the NEASSI, with support from Business Sector Advocacy Challenge (BUSAC) Fund, in a recent study, recommended that a fair and effective tax administrative system is established, as it will lead to a reduction in the cost of doing business.
According to the study, there are different levies and these are; rate “structures where operations are carried from; fees/tolls “levies on use of facilities provided by the assembly for public use; license /Business Operating Permit “specific license based on products or services being offered as well as rent “assembly owned stores at various locations within the district”.
The study revealed some challenges that had impaired progress in tax administration at the district assemblies; some of which included the a sense of mistrust that tax payers have in the administration of taxes, ignorance on the part of the informal sector of the benefits, businesses could derive from registration and payment of taxes, and allegations of corruption in the tax regime, resulting from a weaker check-and-balance mechanism in tax administration.
Others included, higher tax rates and levies, which have had an adverse effect on members and non-member of the association, as the business conditions worsens, thereby causing a decline in their profit margins; the undesired effect is the collapse of some businesses.
The study recommended, based on these observations that an intensive education on the various types of levies, coupled with processes involved in the determination of levies or taxes, be carried out, whiles enhancing stakeholder consultations.
“Also revenue authorities should categorize the informal sector for appropriate taxes and there should be various collections points rather than going to the office which is far from the various business locations.
“There should be the provision of annual revenue report to the business community or the general public and make provision for tax payments in instalment as well as collection of levies should be spread evenly through the year and fair awarding of contract should be encouraged” the statement added.
NEASSI assured of amplifying the voices of all member groups, in ensure an inclusive and transparent tax administration regime in the districts.
“We will strengthen all trade associations for a unified and stronger voice and encourage member businesses to register with the District Assembly for improved recognition and planning as well as hold regular dialogue with the assembly to ensure regular and effective communication”
Mr. Lawrence Luro, Chairman of the Association said; “certainly, a very healthy collaboration and cooperation between NEASSI and Ellembelle District Assembly will help businesses to grow”
He suggested options that will encourage policy makers to make informed decisions on the tax systems.
Stakeholder forum on the study
At the Stakeholders forum at Esiama, Mr. Samuel Adu-Oppong, Head- Axim Sub office of the Ghana Revenue Authourity (GRA) said one of the cardinal principles of taxation is fairness.
“If you have challenges go to the various GRA offices across the country and the officials will explain what needs to be done as a business entity to you”, he added.
He encouraged the various small and medium enterprises to register their businesses as well as get their TIN to enable them get contract from the various sectors.
Mr. Bright Ohene Appiah, Budget Officer at the Ellembelle District Assembly in the Western Region explained that the manual way of revenue collection will be a thing of the past this year.
“We are about starting a pilot programme in Esiama ; currently, we have developed a system where individuals and businesses can sit in the comfort of their homes and pay their bills, already, machines for this project have been procures” he mentioned.
He disclosed that with this system, various businesses can pay their bills through the bank or mobile money account; businesses can pay in installment depending on how the business is doing.
He pointed out that most small and medium enterprises do not know the difference between the GRA and the Revenue Collectors of the various District Assemblies.
Also, he said there should be a rapport in terms of collection of money and service delivery and that communication gap should be bridge.