HOW TO IMPROVE GHANA TAX SYSTEM

What are ten (10) ways that the Ghanaian tax system should be improved?

The complexity of Ghana's tax system places a high value on tax administration. The term "good tax administration" refers to the tax legislation as well as the effective and efficient tax operations used by the tax authority to collect taxes from its targeted tax payers (citizens).

Taxes collected in a variety of ways, although most people associate taxation with income tax (taxes from both corporate and individuals). Individual income tax payments are costly not just for taxpayers who spend time and money preparing and filing forms, but also for the Ghana Revenue Authority (GRA).

The following are some suggestions for improving Ghana's system of taxation:

        Trying to educate the general public: Educating the general populace about the purpose of taxes in Ghana will enable high patronage and will increase the tax system in Ghana, which will be used to provide infrastructure, roads, school buildings, security in the country, and other medical services to improve Ghanaians' health standards, thereby enhancing self-development and national development.

·         The utilization of this enlightening technology, referred to as a database, might very well aid in gathering individual proof to identify who is a Ghanaian or possibly a Ghanaian renter. The creation of these database management systems may show the number of income tax paying residents as well as his or her personal income to continue charging with the tax levy on. Recognizing the number of enterprises and the Effective Corporation's power to regulate taxation in Ghana.

·            Improve worker capacity: Innovative programs and technologically advanced instruments are used by the various tax collecting organizations to offer information to its employees. By teaching them alternative technologies for individuals who pay taxes to secure their tax payments, they will be able to monitor and supervise their maximum performance, resulting in a much more complete tax system in Ghana.

·          Make regulations to control taxation: The state of Ghana could possibly impose laws that regulate Ghana's tax structure, because then the powers to collect all delinquent taxes, including prosecution and jail time for tax evasion, are in place to alleviate fears and panic, allowing for transparency in the management of Ghana's tax system. 

            Data warehouse system and other statistical records will be electronically stored, which will provide accuracy in delivering information and can be kept for a long time if considered necessary for some other initiative and reliable for management to make decisions and other future demands in improving Ghana's taxation system for other development initiatives.

·         Mechanism to deal with import tax and export tax: some of the indirect taxes in Ghana are import tax and export tax which is impose on commodities like goods and services that is been bought and consume, by implementing policies to regulate the tax system in Ghana to boost the economy of Ghana and economy indicators like favorable balance of payment and trade which will influence investor to invest and taxes will impose on them to increase our tax level in Ghana.

·         Coordinate tax benefits for dependent care: Taxpayers may reduce their costs for dependent care through the child and dependent care credit and through flexible spending accounts set up by their employers. They may, however, use only one of the two options for a specific expense, which can make it difficult both to plan how to finance child care and to complete tax returns. Coordinating the two benefits or combining them into a single benefit would address both problems.

• Simplify or eliminate the taxation of Social Security benefits: Whether and how much of a person’s Social Security benefits are subject to income tax depends on the person’s income: single beneficiaries with adjusted income below $25,000 ($32,000 for couples) pay no tax on their benefits; those with higher incomes must include up to 85 percent of their Social Security payments in taxable income. Determining the amount to include requires completing an eighteen-line worksheet that draws on information from other parts of the tax return. Making a fixed fraction of benefits taxable (possibly zero) for all beneficiaries would eliminate that worksheet and make tax filing easier for them.
• Simplify the taxation of capital gains: The income tax currently imposes at least eight different effective tax rates on capital gains, depending on the taxpayer’s regular tax rate, how long an asset was owned, the type of asset, and whether the taxpayer owes AMT. The IRS provides three different worksheets, one with 37 lines, to help taxpayers calculate their tax on capital gains. Allowing a percentage exclusion for long-term gains (and perhaps other kinds of gain) and applying regular tax rates to the rest would sharply reduce the complexity of returns while maintaining different treatment for different kinds of gain.
• Combine tax incentives to save for retirement: Workers can currently save for retirement in various ways that receive different tax treatment; these include deductible, nondeductible, and Roth Individual Retirement Accounts, regular and Roth 401(k)s and similar plans, and traditional employment-based pension plans. Each type of saving has its own eligibility requirements, income limits, and tax benefits, which complicates the task of choosing among them. Combining existing options into fewer alternatives and setting the same income limits for all would simplify workers’ choices and reduce the cost of administering so many programs.