A STUDY INTO THE CHALLENGES OF INCOME TAXATION
Revenue from tax which is a big source of revenue to the Government has been a major concern to many developing countries such as Ghana in recent times. This due to the fact that taxation faces a lot of challenges in developing countries, and once these challenges are not properly dealt with, it becomes a big disadvantage to the government and citizens of that country, as enough revenue will not be generated to the government. Various challenges such as complex tax structure, tax evasion, and inadequate logistics are making taxation difficult in Ghana. All these challenges reduce the amount of revenue generated by the Government. The inability of the government to tackle these challenges will encourage economic instability, poor infrastructural development and poor economic growth. The researcher used Internal Revenue Service Ghana (Eastern Regional Office), as a case study to find out the challenges associated with income taxation in Ghana, as well as solutions to these challenges.
Concerning methodology, data used in compiling this research were gathered from both primary and secondary sources. The management and employees of Internal Revenue Service (Eastern Regional Office) were issued questionnaires. Text Books, Magazines and News Papers on Taxation were also used in compiling this research.
Based on the findings revealed from the data analysis and interpretation, the researcher came up with some suggestions and recommendations. The major findings in this study include: the challenges facing income taxation in Ghana, the causes of tax evasion in Ghana, and ways to properly address the challenges identified. These findings and recommendations, in view of the researcher, will help improve income tax administration in Ghana, if implemented by the government of Ghana, and other tax authorities such as the Internal Revenue Service of Ghana.
The desire to build a civilized country with a strong and sound economy is the desire of every patriotic Ghanaian citizen. Tax payment is the demonstration of such a desire, although most income earners see it as a means of exploitation by the government. Tax payment is a voluntarily contribution imposed by the Government on personal income earners, companies, investors, exporters, importers etc. revenue realised from taxation is a major source of revenue to the Government of Ghana, and as such is an important tool used in the development of Ghana and her economy. However, tax evasion which is the wilful and deliberate violation of the law in order to escape payment of tax, posses a big threat to income taxation in Ghana as it reduces tax revenue to the Government, thereby hampering economic growth and development.
However, this research was undertaken to help increase revenue generated from income tax to the government, by pointing out the challenges faced by tax officials in discharging their lawful duties. Various challenges such as tax evasion on the part of the income taxpayers drastically reduce income tax revenue to the government. This has been a big problem for decades and needs to be properly addressed.