Thursday, June 10, 2010

The Unbearable Lightness of Being... a Ghanaian Tax-payer

The difference between being a Ghanaian taxpayer and an average one is predicated on a simple formula: more tax means more "chop-chop" by the government, where the gastronomical figure of speech means the government is "eating" the money or being corrupt.

Bottom line, though, is that we do see progress: a toll booth on our major motorway, with promises of more to raise revenue for the State. We are also seeing better roads, including the working and eventual finishing of the infamous Spintex Road.

So why are people crying about taxes?

It's really to do with the utility hikes. The government--and this was true with the previous right-wing, property-owning administration of the NPP--has a penchant for increasing the price of utilities in one go, instead of doing it incrementally. This can naturally have an adverse effect on the pocket of consumers. The last price hike was in November 2007, when the Public Utilities Regulatory Commission(PURC) raised rates by some 40%.

Today, the average rate is 42%--still quite high for the average consumer. But I posit that such a hike ought not to be mutually exclusive from the payment of taxes.

Let's face it: no-one likes to pay tax, but at the end of the day, the State must needs raise revenue somehow, plus it is also a way of empowering the citizen to hold his or her leader more accountable. When there is a price hike--whether justified or not--each citizen's voice is amplified by virtue of being compelled to pay more.

Last year, I heard a documentary on the BBC worldservice, which explained that Sweden is the only country where citizens don't mind paying high taxes, because the government has the habit of providing adequately, and Swedes also expect more than mediocre provision.

I believe some day, Ghanaians might just get to that point. But before that, our tax authorities must widen the tax net--through institutions like Ghana's rather-wealthy Social Security National Insurance Trust (SSNIT) -- to cover much of the informal sector, and the super-rich who seem to pay the same taxes that the middle class, and working class pay!
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