The directive to “exceed revenue targets” without fostering innovation can lead to ineffective outcomes in tax collection. This approach may create a high-pressure environment that incentivizes tax collectors to prioritize personal gain over fair and equitable tax assessment.
In the face of challenging economic conditions, the traditional method of enforcing tax collection to meet revenue targets is proving to be counterproductive. A paradigm shift is needed to promote and encourage voluntary tax compliance as a sustainable and equitable strategy for the new Finance Minister, Dr. Mohammed Amin Adam.
The economic landscape of Ghana is characterized by dynamic yet volatile conditions. Taxation plays a pivotal role in providing revenue for the government to fund public services and projects. However, an aggressive tax collection strategy has strained the relationship between taxpayers and the government, proving inefficient in the long run.
Voluntary tax compliance, which is the willingness of citizens and businesses to fulfill their tax obligations accurately and timely without coercion, is rooted in trust, mutual respect, and understanding. This approach is economically efficient, promotes equity and fairness, ensures sustainable revenue generation, and enhances public trust in the tax system.
To encourage voluntary tax compliance, the Finance Minister can implement strategies such as comprehensive tax education and awareness, taxpayer services and support, simplifying tax laws, and building trust through transparency and accountability.
In promoting a culture of voluntary compliance, the government should prioritize tax reform, invest in taxpayer education, enhance transparency, and improve taxpayer services. The transition to a system that encourages voluntary tax compliance requires efforts from all stakeholders. Ultimately, it is a commitment to building a more equitable and prosperous Ghana.
Furthermore, a shift towards promoting voluntary tax compliance offers a more sustainable, equitable, and efficient approach to achieving revenue targets. This strategy aligns with the principles of good governance and ensures that Ghana’s development goals are supported by a fair and resilient tax system.
Lastly, promoting a faceless tax assessment system, which minimizes direct interaction between taxpayers and tax officials through technology, can enhance efficiency, transparency, and impartiality in tax administration. However, mechanisms should be included to allow taxpayers to object or appeal against assessments they perceive as incorrect or unfair.
