https://www.myjoyonline.com/lack-of-understanding-of-tax-system-by-msmes-affecting-compliance-law-lecturer/-------https://www.myjoyonline.com/lack-of-understanding-of-tax-system-by-msmes-affecting-compliance-law-lecturer/

A law practitioner and lecturer, Clara Beeri Kasser-Tee is calling for effective policies to regulate the tax system in the informal sector.

According to Clara Bee Kasser-Tee, most micro, small and medium scale businesses (MSMEs) are overtaxed, hence their failure to comply with tax laws.

Speaking at the launch of a research paper by the Ghana Center for Democratic Development (CDD), she indicated that majority of the players in the informal sector do not have a problem parting with money, but lack the understanding of how the tax system operates.

“I always make the joke in my tax class that Ghanaians don’t seem to have a problem paying taxes if we look at the culture. They sow seeds all the time, they give first and second collections so they do not have a problem parting with money. So if they get to understand the tax system and get to know that they are fair, I believe that they will be good corporate citizens.”

“We need to tailor the policies to suit the size of the businesses and gender-balanced. Women-owned businesses are more in need of information and training as well as education on the dangers of entrusting the paperwork to someone else,” she said.

The research paper dubbed “Access to Justice and Public Services: Experiences of MSMEs in Ghana”, was authored by Mavis Zupork Dome and Daniel Armah-Attoh.

According to Mavis, MSMEs in Ghana do not grow, hence the need for the findings to be taken seriously.

“The findings are very telling and timely because of the recent budget presentation. It is time for policymakers and local assemblies to look into it. The worrying part of the research is that MSMEs are not growing.”

“Some of the challenges we came across were access to capital, high interest on loans, financial management and access to justice services,” she stated.

Research Findings

The survey revealed that majority of owners of MSMES are aware of the mandatory and requirements to obtain a business registration certificate from the Registrar General and obtain an operating permit from the local government authority.

However, about 87% of businesses are non-compliant, whilst 62% of MSMEs are unwilling to pay taxes.

According to the findings, business owners are dissatisfied by public services and the inaccessibility to information as to how taxes are utilized, hence the unwillingness to be consistent in payment.

The research paper also documented the experiences of MSMEs with the judicial service.

It showed that less than one-fifth of businesses use the formal judicial system.

About 87% expressed a lack of trust in the system.

The study suggests a gap between the state’s ability to provide platform, tools and services for MSMEs. It therefore points to the need for creating a mutually beneficial system by making services easily accessible to MSMEs.

The research further recommended the need to computerise and improve awareness of the court system. These when taken into consideration, it believed will build trust of businesses in the system.

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DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.