A recent study has revealed that over 80% of informal sector workers in Ghana are willing to pay tax as majority of the formal sector economy players complain of being ‘over-taxed.’
The report, titled “Understanding the Informal Sector in Ghana”, surveyed over 5000 businesses in a sector which constitutes over 80% of the entire Ghanaian economy but remains under taxed.
[contextly_sidebar id=”2YyFq3w2d0wEi9oa8HhZLIeBa1migQwG”]These informal sector workers included artisans and petty traders among others.
It is believed about 80% of businesses and people in the informal sector of the economy are not paying taxes due to lack of a historical database to track them.
This particular section of the study sought to explore whether people who worked and earned and income felt they ought to pay taxes and 83.1% of the respondents surveyed generally agreed with this assertion with 5.1% of the respondents disagreeing.
The study also sought to explore the reasons for non compliance with the payment of income tax and one of the main reasons suggested was the alleged lack of information for why citizens must pay tax.
However, the study revealed that allegations of ignorance on the reasons for paying tax appear unfounded because a significant number of the respondents said they were well informed on the reasons for paying tax.
61.9% of the respondents stated they were well informed about the reasons for paying tax with only 18.1% of the untaxed section of the informal sector arguing they were not well informed about reasons why they should pay tax.
In an interview with Citi News, author of the report and a member of the National development Planning Commission (NDPC), Eben Amarh, has urged government to enforce the right laws to get workers in the informal sector to pay the appropriate taxes.
According to Mr Armah, the informal sector may be willing to pay the taxes but the government must put in place structures to draw in more of the informal sector under the tax umbrella.
“…We need to put in structures that will translate the willingness into ability to pay,” Mr Armah said.
Mr Amah thus blamed the nonpayment of taxes in the informal economy to the absence of structures and enforcement from the government.
“If you look at the definition of the informal economy, it is because the laws are not enforced and one of the basic structures we should do is the enforcement of the law,” he stated.
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By Delali Adogla-Bessa/citifmonline.com/Ghana