The Dean of the University of Professional Studies Accra,(UPSA) School of Law, Professor Ernest Kofi Abotsi is warning that the current tax regime could force businesses to lessen their tax obligations to the state.
He has advised government to take practical measures to reduce the tax burden on businesses.
Professor Abotsi, who is a constitutional and corporate law expert made the comments on PM Express Business Edition with host, George Wiafe on July 8, 2023.
“The more taxes businesses have to pay to the state, the more they are inclined to hire and cut back on their operations going forward”, he said.
According to him, one of the ways to the deal with the tax avoidance challenge, which it is legal, is to “tighten the screws”.
Some business organisations are already appealing to the Finance Minister, Ken Ofori-Atta to use the Mid-Year Budget to review some of Ghana’s taxes.
Citing some examples, Professor Abotsi recalled some concerns of business organisations seeking to enter Ghana by first enquiring about the tax system.
“They want to compare the tax regime in Ghana to other countries in the region, before they make a move,” he said.
“We believe that it is time for the government to take a second look at the tax exemptions in the country. It’s one area that we are losing a lot when it comes to revenue”, he added.
Business Registration and the Regulatory Environment
Professor Abosti pointed out that even though business registration has improved over the years, more needs to be done to bring relief to entrepreneurs.
“If you are converting an institution that has been more than 50 years old, to deal with these current issues in the country when it comes to business registration, obviously there might be some difficulties”.
“There was a times that we were doing very bad when it comes to business registration, but it appears we have made significant progress over the years”.
He suggested that there must a comprehensive approach to solving the challenges faced by businesses.
“ They often look at the tax regime, enforcement of contracts, power supply, the market position in the sub region and ease to raw materials, as well as the regulatory environment”, he observed.
He is also the view that, there has been substantial progress made by the Office of the Registrar of Companies that which must be commended.
AfCFTA and opportunities for Ghana
Professor Abotsi advised businesses to take advantage of the African Continental Free Trade Agreement(AfCFTA) to network and expand their operations.
He stated that Ghana has become the commercial capital of the AfCFTA by hosting the secretariat in Accra.
“If we do not go beyond hosting the secretariat as a country, we may not realize the associated benefits that the trade pact offers to the various African countries and Ghana”.
