Businesses need more education on tax obligations — PEF CEO

August 28, 2019 / Comments (0)

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The Chief Executive Officer of the Private Enterprises Federation (PEF) Nana Osei Bonsu, has called for more education on the country’s tax laws and obligations for businesses.

His recommendations follow findings of a study carried out by PEF, in collaboration with the Open Society Initiative for West Africa (OSIWA), which identified the lack of understanding of the country’s tax laws as one of the factors inhibiting the ability of businesses to honour their tax obligations.

The study, which sampled responses from 600 business in both rural and urban areas of the country, showed that majority of the respondents were not either aware of the tax laws or did not have a clear understanding of the country’s tax laws, hence the need for more education.

Speaking to the media after a stakeholder validation meeting on tax reforms for Micro, Small and Medium Enterprises (MSMES), Nana Bonsu noted that education was very critical for businesses to understand the importance of paying the right taxes.

“Most of them do not understand the tax laws and tax languages so what they do is to assume what their fair share is and pay. Education is very critical to let them know that tax compliance is mandatory,” he explained.

He added that “they are not aware of the tax laws and even if they are aware, they do not understand and they cannot afford to hire someone who will interpret the tax laws for them. If I am going to pay taxes and I have to get a consultant which comes at a cost, then obviously I wouldn’t want to pay.”

Poor book keeping

He said one of the main challenges contributing to non-compliance was poor book keeping by many businesses.

“If you do not keep proper records, at the end of the year, assessing your tax obligations becomes very difficult.

While acknowledging the importance of MSMEs to the growth of the economy, he said it was necessary for them to put in place systems that would help them honour their tax obligations because PEF would not support the non-compliance of businesses to the country’s tax laws.

The forum brought together private sector players to discuss the findings of the research and to proffer solutions on how to address the identified challenge.

“We have done an engagement with the private sector MSMEs across the nation for about six months and what we presented here is their responses.

The exercise is to make sure that all businesses know that they are obligated to pay taxes. We also want to make sure that they pay their fair share of taxes,” he said.

He said information from the forum would inform further dialogue with duty bearers, the policy makers and the administrative agents to identify a common ground to make sure that MSMEs do not suffer penalties for not being in compliance with their obligations under the law.

Source: Graphic Online

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