INFORMAL BUSINESSES EVADE TAX (PAGE 55, JULY 27, 2011)

SEVENTY per cent of business entities operating in the informal sector in the Northern Region do not honour their tax obligations, the Ghana Revenue Authority (GRA) has indicated.
According to the authority, these entities, mostly sole proprietorships, include retail outlets, petty trading, artisans, food vendors, hairdressing salons and drinking bars.
Consequently, the Domestic Tax Revenue Division (DTRD) of the GRA has sent a note of caution to these operators to register with the GRA to avoid any penalties that may cripple their businesses.
The Northern Regional Communications and Public Affairs Officer (PRO) of the GRA, Mr Abugri Afuugu told the Daily Graphic that the DTRD, as part of its monitoring and inspection, reminded business operators to acquire tax certificates and honour their taxes regularly.
“We have warned them that it is an offence for any person to commence business without a tax registration certificate and a taxpayer identification number,” he stated.
Mr Afuugu explained that many informal sector business operators in the region were evading their tax obligations because they had failed to register their businesses with the tax office.
“Persons who want to start a business must first of all contact the tax office for advice and help relating to their tax affairs and desist from jumping into business without completing the registration process,” he noted.
Mr Afuugu mentioned that the registration of business was now a one-off transaction in the life of a business upon payment of an appropriate fee that is not subject to annual renewal.
“When you register with us, we give you an identification number and a tax certificate, which must be displayed boldly at your workplace,” he said.
He noted that although there were sanctions for operators who failed to honour their taxes, the GRA often wanted to avoid instituting these sanctions.
“Instead, we want business operators to approach us and negotiate the terms of payment of their taxes to make it more favourable,” he said, adding that resorting to court is not always a good option, since it could cripple many businesses.
Mr Afuugu therefore urged all taxpayers, including withholding agents to be alive to their responsibilities in meeting deadlines for settlement of taxes that are due.
The PRO again noted that the GRA was making more efforts nationwide to widen the tax net to capture all sectors of the economy that were supposed to be paying tax.
He said the challenge in the Northern Region had been the informal sector, because those in the formal sector mostly honoured their tax obligations duly.
He mentioned that the Tamale Metropolitan area and the Yendi Municipality served as the two principal tax districts in the region, whiles sub-offices that are situated in Walewale, Bole and Bimbilla co-ordinate tax collection in those areas and nearby communities.