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PEF Conducts Nationwide Consultative Workshops on Tax Reforms for MSMEs

 

PEF CONDUCTS NATIONWIDE CONSULTATIVE WORKSHOPS ON TAX REFORMS FOR MSMEs

 

The Private Enterprise Federation (PEF), the Apex Business Council for the private sector and as part of its core functions seeks to influence business growth and development. In pursuit of this function PEF in 2016 reviewed the Income Tax Act 2015 (ACT 896), which revealed series of gaps in the Act unfavorable to Micro, Small and Medium Enterprises (MSMEs). The burden of taxes on these indigenous small businesses constrain their ability to use all their internally generated funds for expansion and or retooling to grow and become competitive. The cost of tax compliance sometimes result in some businesses being derilict in their responsibility resulting in low levels of tax revenues to Government.

In order to fully address the impact of the current tax regime on the businesses of indigenous MSMEs, the Federation with support from the Open Society Initiative for West Africa (OSIWA) will partner other stakeholders to undertake full research of every aspect of the current tax system in addition to the mirage of fees, levies and tariffs that these business have to pay when added together, make tax compliance virtually unaffordable for the MSMEs.

The entire project including research and evaluation action will allow the Federation and its partners to advocate for a new ta system (TIERED TAX SYSTEM) that will be recommended. Consequently, businesses in different segmented categories (1,2,3,4 etc.) will then be assessed tax liabilities. The criteria for the new tax system will take into consideration varying factors premised among others, on asset size, capitalization, ownership, business turnover and other criteria that may be agreed upon by the various stakeholders to place MSMEs in segmented to reduce the burdensome tax liabilities commensurate to their financial capabilities (ability to pay). 

As part of the process, a Research Team put together by the Federation embarked on a consultative exercise to gather inputs from private sector businesses, professional bodies and other key experts and stakeholders across the four regional centres as follows;

1. 18th October, 2018- Modern City hotel, Tamale

2. 22nd October, 2018- Golden Tulip hotel, Kumasi

3. 26th October, 2018- Protea Marriot hotel, Takoradi

4. 31st October, 2018- Holiday Inn hotel, Accra

During the meetings, the participants mostly MSMEs expressed their opinions on the current tax system and how they think it should be structured to such that it would be less burdensome and they can also be more compliant. The research team led by Mr. Isaac Nyame a tax accountant, took them through a questionnaire which was used to collect data from respondents and also a presentation on the Ghana’s tax system comparative to other countries or jurisdictions. Participants were satisfied with the outcome of the meeting with many calling for more regular interactions with taxpayers especially from the Ghana Revenue Authority.

 

 

 

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