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Bad taxation hinders trading in rural Ghana

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Bad tax procedures and processes are responsible for the collapse of petty trading in rural districts of Ghana.

This was disclosed by Mr. Abugre Robert Coordinator of Afaataba cooperative society at a research report workshop for petty traders at the Zebilla district assembly at the week.

The survey which was funded by the Business Sector Advocacy Challenge Fund (BUSAC FUND) examined the revenue collection activities of Bawku West District Assembly to identify challenges which impact negatively on the business operations, especially petty traders and the revenue mobilisation efforts of the district assembly.

The research revealed several nagging problems. For instance, at Zebilla, Gbatonga, Sapeliga and Binaba the four major commercial towns in the Bawku West District; the survey revealed massive extortion and double taxation. Participants bemoaned the practice saying that it has retarded the growth of their business over the years.

Responding to the issue of double taxation, the district finance officer said that double taxation often arose because of the inability of traders to sell all the goods which were already taxed at the close of the market day. He said that in the circumstance it is difficult for the revenue collectors to tell on the next market day, which animal or product was not taxed.

The finance officer disclosed that the Zebilla District Assembly was constructing a warehouse which when completed will solve the problem of double taxation since traders would then be able to store all goods which could not be sold by the close of the market day. He explained that previously unsold goods that would be moved form the warehouse to the market would not be taxed because they would have been captured by the revenue collectors as already taxed.

He however, cautioned traders of the inability of the new measure to solve double taxation in the case of animals since the warehouse could not house animals, but assured the petty traders of the readiness of his outfit to solve the problem of taxation on animals soon.

What came to light also was that petty traders were not involved in the fee fixing process. Contributing to discussion on the report a female petty trader said that the refusal of the District Assembly to involve them in the fee fixing process was an attempt to force them to pay any amount that was fixed which for her was tantamount to extortion. But even forced payment was not the only form of extortion that petty traders in the Zebilla District markets suffered; most traders who were illiterate were directly extorted by revenue collectors. Some participants also complained that some revenue collectors use one ticket to serve many traders.

The finance officer said that such practice was criminal since it diverted revenue to the pockets of revenue collectors and warned that any re venue collector caught in the act would be prosecuted. Participants suggested to the district assembly to increase the commission paid to revenue collectors so as to motivate them and to curb extortion.

The research also revealed some level of disparities in the payment of fees by traders. For example, in some cases the same amount of fee was paid by traders who trade goats, sheep, or cattle irrespective of the size of the animal. According to the research findings, this practice created tension among petty traders since those who dealt in small animals felt cheated.

The petty traders also complained that revenue collectors were very harsh and some times used bad language to make them pay fees. In response to this Mr. Robert urged the revenue collectors to move away from the conventional way of relating with their clients to the human relations approach in order to improve their revenue mobilisation.

Source: Public Agenda

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