Presentation by Leonard Shang-Quartey ISODEC Accra

Abuse of Tax Incentive Mechanisms and Evasions Low Tax Base and Associated Issues Weak Tax Bureaucracy Corruption Low funding to the tax Authority Lack of competiti ve remuner ation of staff Poor tax policies and admin Disincen tive of frequent amnesti es granted to tax offender s High discretio nary powers in the hands of public officials Misappli cation of an exemptio n facility High dominan ce of indirect taxes Low progress in efforts at ensuring high tax coverage in the informal sector Little attention given to other incomes sources Leakages Weak collectio n and accounti ng structur es

CountryRecommendations UgandaReview the tax exemption structure for more revenues for the fiscally squeezed Treasury. BangladeshSalaries of foreign technicians should be reviewed and specifically defined since a large number of foreign technicians are working in Bangladesh and many companies often fraudulently misuse this measure Exemptions of income from poultry, fisheries, livestock, horticulture, etc. Should be reconsidered as there is widespread misuse of the provision. The tax holiday facility should replaced with the accelerated depreciation allowances or lower tax rates in earlier years and gradual increase in the later Explore use of tax credits which generates greater revenue as compared to tax exemptions or allowances

CountryRecommendations GhanaFree Zones should be compelled to improve transparency by researching into the cost benefits they generate Government should resist the pressures from special interest groups for “special treatment Government should address the culture were evasion is still regarded as a badge of honour for majority of people in Ghana SenegalAvoidance of sacrifices made through "tax expenditures" which have no effect on the incentives to invest and create jobs EgyptEliminate tax evasion by non-commercial professions, through collaboration between professional unions and the tax authority Review the law of customs exemptions as well as the customs law

CountryRecommendations UgandaConduct research to establish the factors that have contributed to low tax, GDP ratio and the growing tax gap Government should issue national identification to citizens Review GPT and re-introduce it as a mass tax for supporting Local governments and propel citizens to consider their role and responsibility towards government NigeriaPolicy on Tax Identification number should be implemented Government should create more employment avenues to widen tax base “Government should be sincere to provide public goods and services like electricity supply, Water supply, good road networks and health institutions in Nigeria to encourage the tax payers”

CountryRecommendations GhanaReplace multi–rate sales taxes with single rate taxes with few exemptions Eliminate most income tax credits and deductions, and progressive rate structures, in favour of a flat (or flatter) rate Assess and collect significant penalties for lack of payment Frequent amnesties should be avoided as they only send a signal that tax evasion will be forgiven EgyptIntroduction of the VAT to replace the sales tax system but until basic commodities have been exempted

CountryRecommendations UgandaThe Revenue Authority’s should be well resourced for improved performance. Cost of collection of revenue at 2.4% is within the acceptable limits of less than 5%. Need to invest into research to improve quality of tax policies and administration GhanaMove towards systems of voluntary compliance and self – assessment which is partially practiced in Ghana now Continue to replace manual systems with computerization, based on careful planning and design of the computerization systems.

CountryRecommendations NigeriaGovernment should tackle corruption at all levels to avoid leakages There should be proper checks and balances on the tax officials to curb the corrupt practices by some tax officials in Nigeria

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