The coming establishment of a tax court should greatly aid government’s efforts at meeting its Domestic Non-oil Tax Revenue for 2021. That’s according to a tax analyst.
According to the 2021 budget, Total Revenue and Grants for this year is pegged at GH¢72.4 billion, equivalent to 16.7 percent of GDP, out of which Domestic Revenue is estimated at GH¢70.9 billion. Of the total Domestic Revenue, Non-oil Tax Revenue will constitute about 74 percent and amount to GH¢53.6 billion, equivalent to 12.4 percent of GDP, reflecting the impact of expected improvements in tax compliance and reforms in revenue administration.
To assist in the efforts of government, the Judiciary according to Chief Justice Kwesi Anin Yeboah, is preparing to establish a tax court to deal with the prosecutions of Tax Cases.
Commenting on the expected impact of such a court, Tax analyst Timore Francis Boi tells Citi Business News, the new development will shore up government’s revenue mobilization drive as the punishment of defaulters will serve as a deterrent to others.
“It’s going to serve a very strong warning to persons who don’t like paying taxes. If you look at Section 80 of the Revenue Administration ACT, it says that failure to pay taxes can lead to you being imprisoned. So if you see your colleague going to prison for some tax offence you are likely to learn from that.”
“Punishment for the offences committed by companies are expected to be borne by the leadership of the organizations in default,” he added.
Failure to comply with a tax law (Section 78)
Taxpayers are obliged to comply with tax laws and Section 78 provides that a person who fails to comply with a provision of a tax law commits an offence. Where a specific penalty for the offence committed is not provided, then that person is liable on summary conviction to a fine of not less than one thousand penalty units (GHS 12,000) and not more than two thousand and five hundred penalty units (GHS 30,000) or to a term of imprisonment of not less than 2 years and not more 5 years or to both. A judge can sentence a tax defaulter to either fines or both fines and prison term.
Non- compliance means failure by a taxpayer to fulfil an obligation imposed by a tax law. They include failure to register for tax, failure to file tax returns, failure to keep proper records, failure to provide information etc.