Tax Analyst, Timore Francis Boi says the country’s failure to define the informal sector has led to the constant loss of revenue in the sector.
According to him, a standard survey of the sector shows it creates about 80 percent jobs in the economy and is basically its backbone, but seepages in this sector has affected the country’s revenue collected from taxes.
“The informal sector creates a lot of work in the country. This is where we find traders, hairdressers, chop bar and kiosk operators. And it is difficult to take income tax from this group. Some do not even keep records and that makes it difficult to identify their income and charge income taxes.
Because we can’t identify their net income, we can’t get anything in terms of tax from them and have to look at the informal way of taxing where taxes are placed on what they sell (goods and services). Also because they do not have fixed offices and keep moving from point A to B, the GRA cannot go to them and even assess them to charge them income tax.”
He disclosed some professionals in the formal sector have used this to move into the informal sector. “Now we have a problem defining the informal sector and some people who don’t need to be there have found themselves in that bracket. We have some lawyers and accountants in there and are not paying taxes.”
In an interview with Samuel Eshun on the Happy Morning Show, he added that self-employed persons have also classified themselves under the informal sector and are not paying income taxes when they should.
The tax expert champions intensive public education by authorities if they want to increase the tax net and rope in the informal sector into the income tax bracket.
