PwC wants Ghana's 2011 budget to focus on tax uniformity

PricewaterhouseCoopers (PwC)Ghana wants government’s 2011 budget statement to focus on prompt issuance of refunds of taxes paid in excess by companies to state revenue collection agencies, and practical guidance regarding application of provisions in various petroleum agreements to ensure uniformity in the country’s tax system.

Cases of tax refunds occur when companies pay their taxes before production based on projection of profits after production, which sometimes do not materialize.

Other proposals include computerization of tax credit certificate issuance process, consultation prior to passing new tax legislations, consolidation of tax laws into one Revenue Act and streamlining of Value Added Tax (VAT) on imported services, among others.

This is contained in a proposal for consideration by government in formulating the 2011 budget to ensure a transformed approach by state institutions in dealing with concerns of the private sector.

At the 2011 Pre-Budget Forum themed: ‘Dawn of a New Ghana: Creating a Strong Economic Base for Sustainable Growth: The Case for Assuring Stronger Accountability’, Mr. George Kwatia, Partner at PwC, told business executives, private sector operators, policy makers and government officials that the proposals were the expectations and views submitted to the PwC by business entities.

The forum, which was also attended by business analysts and other stakeholders, is an annual event organized by the PwC, which is part of efforts to seek views of interest groups and the private sector when formulating the budget.

“It is the hope of businesses that government strikes out unnecessary elements in the tax structure to avoid instances of refunds which take a long time to be paid,” he said.

Mr. Kwatia argued for the standardization of practices across various offices, issuance and application of practice notes and guidance to allow the same basis of understanding, interpretation and practice of tax laws

This, he said, would address instances where a different state agency gives a different interpretation and meaning to a similar piece of legislation that separate agencies administered in the course of their operations.

Mr. Kwatia revealed that businesses also proposed that upon request or application, the Ghana Revenue Authority (GRA) should, in good time, state its position on contentious matters regarding tax administration.

Mr. Seth Terkpe, Deputy Minister of Finance and Economic Planning, said: “government’s objective is to improve the business environment through adoption of appropriate strategies and implementation of policies that would enhance the growth and development of the country’s economy.”

He indicated that the most sophisticated tax payers do not practice voluntary tax compliance and that the essence of compliance is a fair tax policy for all.
“With the establishment of the GRA, and the automation of the tax agencies, concerns bordering on tax administration would greatly be improved,” he expressed.

Ghana, which joins the ranks of oil producers after it starts pumping oil from the Jubilee Field at the end of the year, is expected to present the 2011 budget to the 230-member legislature next month.

The budget is expected to reflect the revenue management from oil production and show how the government intends to keep tabs on growing spending.

Also, the economy is expecting to achieve tremendous growth next year, since the 2011budget is focused on consolidating and building on the gains of economic stabilization that have been made in the past two years.

The 2009 and 2010 budgets were used to stabilize the economy, which government said was in fast decline.