The 2021 Afrobarometer report released by the Centre for Democratic Development (CDD) suggests that many Ghanaians do not know what their taxes are used for.
The latest survey showed that eight out of 10 citizens (79%) citizens agree that they are obliged to pay taxes, however, they are unsure how the government uses tax revenues.
“The analysis finds that citizens are more supportive of taxation if they believe the government is doing a good job of delivering basic services. But many citizens also express mistrust of tax authorities and see widespread corruption among tax officials,” the study indicated.
The report insists that Ghanaians endorse taxation and are even willing to pay higher taxes to support the country’s development but find the avenues for utilisation problematic.
In March, Parliament in its 2021 budget statement introduced new taxes.
These taxes included a 1% COVID-19 levy, 1% increase in National Health Insurance Levy, and 1% increase in flat VAT rate, as well as a 30 pesewa increase in fuel prices to take care of excess power capacity charges [20 pesewas] and Sanitation and Pollution Levy [10%].
These increments were met with fierce backlash from the public as well as the Minority in Parliament because of current economic hardship.
Some key findings in the latest Afrobarometer report
A large majority (72%) are willing to pay more in taxes to help finance the country’s development from domestic resources rather than through external loans (Figure 2).
Citizens who think the government is doing a good job of improving basic health services, addressing educational needs, providing water and sanitation services, maintaining roads and bridges, and providing a reliable supply of electricity are 6-8 percentage points more likely to endorse its right to collect taxes (Figure 3).
But large majorities say it’s difficult to find out what taxes they’re supposed to pay (61%) and how the government uses tax revenues (70%) (Figure 4).
Only four in 10 citizens (39%) say they trust the tax authorities “somewhat” or “a lot.” More than eight in 10 (84%) think at least “some” tax officials are corrupt, including one-third (34%) who think that “most” or “all” are involved in graft.
This report comes on the back of the newly introduced taxes by the government