Excerpt
TABLE OF CONTENTS
CONTENTS PAGES
DEDICATION
LIST OF ACRONYMS
TABLE OF CONTENTS
LIST OF TABLES
LIST OF FIGURES
ABSTRACT
CHAPTER ONE
1.0 INTRODUCTION
1.1 Background of the Study
1.2 Statement of the Problem
1.3 Significance of the Study
1.4 Purpose of the Study
1.5 Objectives of the Study
1.6 Research Questions
1.7 Scope of the Study
1.7.1 Subject Scope
1.7.2 Geographical Scope
CHAPTER TWO
2.0 LITERATURE REVIEW
2.1 Introduction
2.2 Definition of Small-scale Enterprise
2.3 Types of Small-scale Businesses
2.4 Characteristics of Small-scale Enterprise
2.5 Some Common Features of Small Scale Enterprises in Ghana
2.6 Contribution of the Small-scale Enterprise
2.7 What is Tax
2.7.1 The Concept of Taxation
2.7.2 Forms of Taxes
2.7.3 Objectives of Taxation
2.7.4 Tax Policies
2.7.5 Identification of Tax Payer
2.7.6 Fines and Penalties
2.8 Methods of Taxing the Small Scale Business
2.8.1 Administering Small Business Taxation
CHAPTER THREE
3.0 METHODOLOGY
3.1 Introduction
3.2 Research Design
3.3 Study Population
3.4 Sampling
3.4.1 Sampling Design
3.4.2 Sample Size and Sampling Procedure
3.5 Study Variables
3.6 Sources of Data
3.6.1 Secondary Data Collection
3.6.2 Primary Data Collection
3.7 Methods of Data Collection and Instruments
3.7.1 Questionnaires
3.7.2 Interviews
3.7.3 Observation
CHAPTER FOUR
4.0 PRESENTATION, ANALYSIS AND INTERPRETATION OF FINDINGS.
4.1 Introduction
4.2 Background Characteristics of the Respondents
4.2.1 Age of the Respondents
4.2.2 Level of Education of the Respondent
4.2.3 Gender of Respondents
4.3 Assets/Stock Level Held in Business
4.3.1 Shortage in the Stock Level
4.3.2 Stock Level and Profitability
4.3.3 Average Daily Sales
4.3.4 Capital Employed
4.3.5 Average Daily Expenditure
4.3.6 Average Amount of Tax Paid
4.3.7 People Employed
4.4 Tax Awareness of Tax Payers
4.4.1 Tax Awareness
4.4.2 Tax Assessment
4.4.3 Records Kept by Business
4.4.4 Assistance Regarding Tax Awareness
4.5 Problem Faced By Tax Payers
4.5.1 Mode of Assessment, Collection and Tax Collectors
4.5.2 Efficiency of Tax Officers
4.5.3 Specific Effects of the Taxes on Business
4.5.4 Suggestions from Tax Payers
CHAPTER FIVE
5.0 SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
5.1 Introduction
5.2 Summary of Findings
5.3 Conclusion
5.4 Recommendations
5.5 Areas for Further Research
5.6 Limitation of the Study
REFERENCES
APPENDIX A
APPENDIX B
DEDICATION
We dedicate this work to God Almighty, our parents, course mates and all loved ones who have contributed in diverse ways in making our academic career a success. Thank you all and may God richly bless you.
LIST OF ACRONYMS
Abbildung in dieser Leseprobe nicht enthalten
LIST OF TABLES
Table 4.1 Respondents Educational Level
Table 4.2 Level of Stock
Table 4.3 Shortage in Stock
Table 4.4 Relationship between Stock Level and Profitability
Table 4.5 Capital Employed in Business
Table 4.6 Average Daily Expenditure
Table 4.7 Awareness of Tax
Table 4.8 Tax Authorities Ever Assess Business for Tax Purposes
Table 4.9 Forms of Records Kept by Business
Table 4.10 Assistance in Creating Tax Awareness
Table 4.11 Mode of Assessment, Collection and Tax Collectors
Table 4.12 Efficiency in the Work of Tax Officers
LIST OF FIGURES
Figure 3.1 Wa Municipal Map
Figure 4.1 Age Distribution of Respondents
Figure 4.2 Gender of Respondents
Figure 4.3 Average Daily Sales Made by Businesses
Figure 4.4 Average Amount Paid as Tax
ABSTRACT
The research was carried out in Wa Zonal Council, within the Wa Municipal District in the Upper West Region of Ghana. The main objective was to ascertain the impact of taxation on the performance of small scale businesses in the study area. Questionnaires, interview guide and observation were used in getting primary data on the field and a sample of eighty (80) respondents from among two strata were randomly selected after being stratified into common groups. Percentage, frequency charts and cross tabulation using the Statistical Package for Social Sciences (SPSS) and Microsoft Excel were the methods used in analyzing the data.
The findings derived from the survey conducted are summarized below:
The outcome of the study justifies that taxation has an impact on small scale businesses. There is a fairly strong relationship between taxation and business performance at Wa Zonal Council. This is very typical of small scale businesses with a lower capital base. The study revealed that, almost all businesses with GHC 2,500 ($500) or less as capital suffer a decline or stagnation in business due to taxation. The study also revealed other setbacks in business performance as stock availability and/or its adequacy
CHAPTER ONE
1.0 Introduction
Taxes dominates the economy of most governments with respect to revenue accrued around the world. Countries with minimal or no natural resources like USA rely mostly on taxation as their main source of revenue.
The study is meant to establish the impact of taxation on the performance of small scale business in Ghana. In order to identify and assess the tax obligations, policies and problems affecting the performance of small scale businesses, questionnaires will be introduced and interviews will be conducted for both qualitative and quantitative research designs. Data will be gathered from both primary and secondary sources. The performance of small scale businesses in Wa Zonal Council is affected by stock levels, capital employed, daily expenses, daily sales and the average amount of taxes paid annually.
In this chapter we shall consider the background of the study, statement of the problem, purpose of the study, objectives of the study, research questions, scope and significance of the study.
1.1 Background of the Study
Many countries, including Ghana, depend on taxation as a means of generating the required resources to meet their expenditure requirements. These countries will likely find themselves in growing fiscal imbalance when their revenue productivity falls below their expenditure. The need for fiscal adjustment then becomes particularly necessary to restore balance in government budget. (The African Economic Research Consortium, 1998)
A strong and efficient tax system provides the basis for enhanced economic growth and development. The governance of fiscal policy, which controls the amount and structure of taxes, expenditure and the debt management, is a powerful instrument for stabilizing the economy. It ensures the efficient allocation of public resources and serves as a precondition for economic growth (Compos and Pradhan, 1996).
The dynamic role of small scale enterprises in developing countries as engines through which the growth objectives of such countries can be realized has long been recognized (Ashok, 2002). This is true as it is estimated that small and medium enterprises (SMEs) employ 22% of the adult population in developing countries (Daniels, 1994).
This research is focused on the impact of taxation on the performance of small scale enterprises in Wa Zonal Council to unravel the skills, techniques, managerial competencies and the systems that must be present in the operations of the small scale enterprise.
Taxation increases incentives for public participation in the political process and creates pressure for more accountability, better governance, and improved efficiency of government spending. Taxation also creates incentives for governments to upgrade their institutions for tax collection and administration and to provide more public services (Moore, 2007).
Taxes have existed virtually as long as there have been organized governments and ever since tax have evolved through a number of reforms. The government in an attempt to widen the tax base and collect more revenue has had to levy several taxes especially on business enterprises in Ghana which constitute a large part of the formal sector. The taxes charged on business enterprises in Ghana include; corporation tax, value added tax, presumption tax and exercise duty. The government has made some recommendable efforts to promote development through taxation since the inception of the current taxation laws for purposes of promoting development. The main objective of taxation in Ghana has always been to mobilize resources needed to meet the aspiration of government. This is because for any government to be effective, strong, competent and capable of spearheading development, resources have to be readily available in its treasury so as to be in position to provide goods and services to the people adequately.
According to Manasseh (2000), a tax is generally referred to as a compulsory levy imposed by government upon assesses of various categories and taxation is a compulsory and non-refundable contribution imposed by government for public purposes. In Ghana a considerable fraction of the businesses are sole traders operating small scale business, locally owned and managed by individuals or families and often with very few employees working at a single location.
These small scale businesses are locally owned and managed by private individuals who sometimes employ their family members and bears a wide tax burden which has led to poor performance. Therefore, it is against this background that the researchers undertake the study to investigate more about the problem using Wa Zonal Council as a case study to evaluate the impact of taxes on the performance of small scale business.
1.2 Statement of the Problem
Taxes are raised by the government to generate revenue used to provide services to the public such as; Health centers, telecommunication, roads, schools and electricity and this have helped to improve on the performance of small scale business. According to Teriba (1978) taxation when applied excessively on the income of corporate bodies discourages industrial growths and so brings about an increased unemployment in economy. Small scale enterprises like any other business cannot be carried on extensively unless funds are available for maintenance and procurement of equipment and necessary input. Despite the effort put in place to improve the performance of small scale businesses, sole proprietorship, traders and table top businesses in Wa Zonal Council is still poor. This could be due to the increasing tax burden brought about by tax rates which are revised annually. These rates seem to be taking an upward trend (Gordon and Dawson, 1987) which has led to winding up of some small scale enterprises. This prompted the researchers to investigate more about the impact of taxes on performance of small scale business enterprises.
1.3 Significance of the Study
Taxation, as a compulsory levy on the operations of a business for government in maintaining, stabilizing and developing the economy have been a major issue in Ghana where a lot of researchers have develop interest in the impact of taxation on the performance of small business. This study gives a clear insight into the benefit derived by different stakeholders as indicated in the following ways:
Traders will learn their duties as tax payers and tax being one of the operational cost of the business must be paid;
Legislative Assembly (parliament) will amend part of the tax act which are unfair to small scale businesses;
Ghana Revenue Authority will use appropriate trade friendly methods when collecting taxes which will assist the Authority to know the degree of corruption of its officials in the tax administration; To revise tax rate and fight corruption among tax collectors;
To make the general public be aware of different form of tax to every business because tax is a compulsory levy which forms part of the business operating expenses.
Again, this study is of academic significance to the extent that it will serve for better understanding of the impact of taxation on small scale business in Ghana.
1.4 Purpose of the Study
The purpose of the study was to establish or evaluate the impact of taxation on the performance of small scale business in Wa Zonal Council.
1.5 Objectives of the Study
Small firms constitute more than half of business establishments in most developing countries and in Ghana for that matter (WP/BOG-August 2009). For the various revenue agencies to raise the needed revenue for developmental purposes, small firms have to be given serious consideration in terms of revenue mobilization and compliance. Though it is generally believed that it is not economically feasible raising revenue from small scale business.
The general objective of the study is to assess the performance of small scale business in Wa Zonal Council. The specific objectives of the study are therefore;
a. To find out if tax payers are aware of all their tax obligations and policies.
b. To identify the problems affecting tax payers and their business.
c. To assess the performance of small scale business in Wa Zonal Council.
1.6 Research Questions
To achieve the purpose of the study, the research was guided by the following research questions;
a. Are tax payers aware of their obligation?
b. What are the problems faced by tax payers?
c. What is the performance of small scale business in Wa Zonal Council?
1.7 Scope of the Study
1.7.1 Subject Scope
The study will cover small scale businesses in Wa Zonal Council within Wa Municipal. Precisely, the study will critically examine the performance of small scale businesses, tax payers' awareness of their tax obligations and problems faced by the tax payers and their impact on the business.
1.7.2 Geographical Scope
The study will be undertaken in Wa Zonal Council within the Wa Municipal. The selection of the location was influenced by students (researchers) familiarity with place, with students studying in the same geographical location. This will ease the data collection process for the success of the research.
CHAPTER TWO
2.0 LITERATURE REVIEW
2.1 Introduction
This chapter presents literature from other sources on tax performance pertaining to small-scale industries. The review will be based on discussing and acknowledging what authorities and experts in the field have written in their books and published articles.
Areas to be tackled in this chapter include the following:
a. definition of small scale enterprises
b. types of small-scale enterprises
c. characteristics of small scale enterprises
d. contribution of small scale enterprises in Ghana
e. problems facing small scale enterprises in Ghana
f. the role of national board of small scale enterprises in Ghana
g. the concept of taxation
h. definition of taxation
i. tax policies and method of taxing small scale business
j. Administering taxation in business organization with particular attention on small-scale enterprises and how effective application of those principles can lead to the effective operation of small-scale enterprises in Wa Market.
k. In business organization with particular attention on small-scale enterprises and how effective application of those principles can lead to the effective operation of small-scale enterprises in Wa Market.
2.2 Definition of Small-scale Enterprise
The term small-scale enterprise has been defined in several ways. These definitions vary from one country to another and from one industry to the other. Most often the definitions have been in terms of either the capital or the number of persons engaged. The industrial policy of 1972/73, a small-scale enterprise was defined in Bangladesh as “a unit with no more than $250 of fixed assets including land (Dhingra, 2005).
According to the Australian Fair Work Act 2009, a small-scale business is one that engages fewer than fifteen (15) employees.
The European Union also recognize employing below fifteen (15) as a small-scale business. The International Labour Organization (ILO) defines it as a sector whose entry is comparatively easy, relying on indigenous resources and are family owned.
The Ghana Statistical Service considers firms with less than 10 employees as a small-scale enterprise. Some authorities also base their definitions of small-scale enterprise according to the methods such as turnover (sales) volume, assets or net profit (Kuriloff, 1996). Drucker and Peter (1986) viewed small-scale business as a business unit that is privately owned and operate with a small number of employees and relatively low volume of sales and capital base.
According to the National Board for Small Scale Industries (NBSSI, 1999) in Ghana, the main institution charged with the responsibility or micro, small and medium scale enterprise development, state “in fixed assets terms excluding land, building and vehicles, the small firms asset should not exceed $10,000 (NBSSI, 1999).
Enterprises in this sector operate on small scale in an unregulated and competitive market, they are labour intensive and use adopted technology. It employs not more than 9 workers with the workers usually acquiring their skills outside the formal educational system. Typical examples of small-scale businesses include Convenience stores, often small-scale shops (such as barbering, tradesman, food vendors, bicycle repairs, photographers, small-scale manufacturing firms and many more.
2.3 Types of Small-scale Businesses
According to NBSSI (1999), there are two types of small businesses namely Micro and small-scale enterprises.
Micro enterprises:this is an enterprise that employers up to five people or have fixed assets excluding land and buildings not exceeding $10,000.
Small-scale enterprise:it is any enterprise employing between six (6) and twenty-nine (29) people or having fixed assets excluding land and buildings not exceeding $100,000.
2.4 Characteristics of Small-scale Enterprise
By the mode of their operations, small-scale enterprises have peculiar characteristics that differentiate them from joint ventures and companies. These include the following:
Firstly, small businesses do not require much capital especially cash to start and operate a small business. Thus, the capital required in the form of cash to set up these form of enterprises are normally low.
Secondly, it is labour intensive. That is, it employs or makes use of man-hours in production and sales activities. Even though it is normally a one-man establishment, workers are needed to operate effective activities of the business, especially in the area of marketing their products.
Moreover, entry requirement is also easy. It does not require much to enter this business sector. All that one need is an idea, technical knowledge and little finance.
They rely on indigenous materials and low technology. Most of the goods produced in this category of business do not require much technology and foreign materials. As a result, the machines needed in the production are not so advanced. They rely mostly on local raw materials and do not employ advanced technology in its operations.
Workers usually acquire skills outside the formal education system. That is, they usually do that through apprenticeship.
Lastly, it managed by owners or part owners and not through the formalized management structure.
2.5 Some Common Features of Small Scale Enterprises in Ghana
In Ghana, small-scale enterprises have the following features. They are established with fewer than nine (9) workers. They form a significant component of the industrial sector of the Ghanaian economy and account for more than 65% of the total industrial employment (NBSSI, 1999). Anane (1993) also noted that, small-scale businesses are generally engaged in light consumer goods primarily related to clothing, furniture, food and beverages among others.
Almost all these small-scale firms are wholly owned and organized by sole proprietors.
In Ghana and other developing countries, a large number of the small-scale entrepreneurs are women. Proprietors and family workers form the largest component of the labour force.
The apprenticeship form of labour force is mostly used. Hired labour forms the smallest segment of the small-scale enterprise employment in developing countries.
In Ghana, most of the small-scale industries are located in the rural areas.
Most of the funds for establishing and expanding the firms come from personal savings, relatives or retained earnings. The extent to which the formal credit institutions reach these firms is limited. The amount of capital is modest in their capital stock. Fixed assets (building and equipment) form the largest component of the capital stock.
2.6 Contribution of the Small-scale Enterprise
The role of the small-scale enterprises cannot be over emphasized as they play tremendous role towards the development of countries in the world (Daniels, 1994). Their role is tremendous in developed countries like the United Kingdom and the United States of America. According to Anane (1993), small scale in the United States of America employed 55% of the total work force, which accounted for 55% of all business introversions and made up of 40% of the Gross National Product.
In the United Kingdom, small-scale enterprises accounted for 21.5% of the National Net Output and 18.3% of employment in 1972 (Desai, 2001).
According to Gangadhara (1999), small-scale enterprises do not decide on long board meetings. Decisions are directed at seizing the market trend and maximizing profit, the goods and services produced generally do not require advance machines and a lot of money. As and when it is appropriate they make use of simple and advanced technology in order to meet their production targets and profit (NBSSI, 1999).
Most large companies after production and services for example, need cost effective channels distribution. Small-scale enterprises play this role perfectly.
Furthermore, instead of having to get to the main source of a product or services, one has to obtain it. Kent (1990) noted that, Small-scale enterprises are capable of nurturing and developing entrepreneurship that is they can see as a nursery for entrepreneurial talent.
Small-scale enterprises can make a significant contribution to the technological base of the country. In 1993, small-scale enterprises accounted for 55% of the business innovations in United State of America and in 1972 more than 805 creatures in inventions in United Kingdom (Reynolds and Paul, 2007).
2.7 What is Tax?
Tax is a fee charged (levied) by a government on a product, income, or activity. The purpose of taxation is to finance government expenditure.
Taxes can also be seen as compulsory extractions that involve personal obligations for common public purposes.
According to Dalton (1996) tax is a compulsory contribution impose by a public authority irrespective of the amount of service rendered to tax payer in return; professor Seligman (2004) defined tax as a compulsory contribution from a person to the government defining the expenses incurred in the common interest of all without reference to special benefits compared. The government offers these functions of administrative, development and social functions effectively.
While the performance of any firm is measured by the contribution and number of employment it is providing, an increase in sales, income, profit and thus capital which portray a survival capability in case of any problem facing the firm.
Salemi (2010) argues that there are various types of taxes. That is income tax, cooperate tax, sales tax, excise tax, custom duty, fees, price, fines, special assessment, VAT along others. The government levy taxes to accomplish the following purpose that is raise revenue, maintain economic stability, solve unemployment problem, offer protection policy, social welfare and help achieve fair distribution of resources by optimally allocating resources and increase the rate of economic formula. But when imposing any tax, the following conditions and challenges must be fulfilled that is Equality, Certainty, Convenience, Economical Productivity, Elasticity, Flexibility, Simplicity and Durability otherwise tax will not be fulfilling its objectives.
2.7.1 The Concept of Taxation
Most developing countries like Ghana appear to face severe budgeting pressures with rising demands for expenditures and limited scope for raising government revenue. Therefore government adopt the concept of taxation in other to raise revenue to meet his expenditure. This concept makes use of assessment, collection, administration and management of taxes in Ghana. Taxation deals with raising public revenue, managing public expenditure and public debt. The general idea behind taxation is the provision of public goods and service. However the benefit received by tax payers from the government are not related to or proportional to the tax paid (Bhatia, 2002).
Taxation is a payment which cannot be avoided without attracting a punishment and in return of which no gain is promised by the government to the tax payer (Balunywa, 1988). The government is responsible for providing to its citizens certain public facilities and service like road, hospital, schools and market securities.
Taxation has also been defined by Kaldor N (1995), as “the impositions on the people by the sovereign powers are nothing else but the wages due to them that hold the sword to defend private men in the exercise of their several trades and callings”. This view is supported by (Oteiku James, 1992), who also defines taxation as “the subject, when properly taxed, contributes only some of his property in order to enjoy the rest”. Perhaps, the modern view of taxation stems from the common premise that no one can be an island for him/herself. Thus, the most appropriate definition of taxation is that by Goldsmith Selma F. (1951), who defined taxation as “the process whereby a state or government exacts contributions from its citizens or from the residents of its territory for the maintenance of the state machinery. Harley Lutz also highlighted on the point that: “the modern viewpoint in taxation is a product of the growing social solidarity and sense of common social obligation that have characterized human progress during the last hundred years. The contributory factor in the modern concept emphasizes the greater social unity and the stronger sense of common burden and responsibility, which are features of modern life. All should therefore, contribute to its effective support”.
In Ali-Nakyea Abdallah (2008), taxation has been defined as the levying of compulsory contributions by public authorities having tax jurisdiction, to defray the cost of their activities in which no specific reward is gained by the taxpayer.
2.7.2 Forms of Taxes
Two broad classes of taxes can be identified. These are direct taxes and indirect taxes. The basis of this differentiation is the extent to which a particular tax burden could be passed on to a third party (or the final consumer) by the initial taxpayer.
Direct Taxes
All taxes which cannot be passed onto third parties or the final consumer by the initial payer are considered as direct taxes. These include personal and corporate income taxes, capital gains and gift taxes (Victor Akakpo, 2007). Within the formal sector, the main direct taxes are income tax, capital gains tax, gift tax, rent tax and stamp duty. In the informal sector, the major ones are vehicle income tax (VIT) and tax stamp. Employee income tax is applied under the “PAY AS YOU EARN” (PAYE) system. 'PAYE' is the routine deduction of tax at source from your income whenever you are paid. (WP/BOG 2009/01)
Indirect Taxes
Indirect taxes on the other hand, are those taxes, the burden of which can be transferred with relative ease by the initial taxpayer to third parties. This tax is levied on one person in the expectation that the tax will be shifted or passed on to another person. Here, the incidence and impact are on different persons.
Indirect taxes comprise Sales tax/VAT on both domestic and imported goods and services, petroleum taxes and excise duties. Prior to the introduction of VAT in Ghana, the excise tax system was perceived as better structured and therefore more efficient than the general consumption taxes. Sales tax was imposed on goods and services at the manufacturing and import stages, whilst Value Added Tax (VAT) currently 12.5 percent (2.5 percent for GETFUND) is a tax applied on the value added to goods and services at each stage in the production and distribution chain and on imports. It forms part of the final price the consumer pays for goods or services. In some countries it is called 'Goods and Services Tax' or GST.
2.7.3 Objectives of Taxation
Several objectives exist in support of taxation. However, the objective of taxation are bound to differ between countries and even in the same country, among government with varying ideologies. Notwithstanding these differences, the primary objective for taxation remain common and serves as a driving force for decision on the nature and form of taxation.
One such primary objective of taxation is the removal of poverty and inequality.In Ghana and other West Africa countries, the progressive tax system is used by the government and the money that is realized is used to provide social amenities that will benefit both the rich and the poor, which tend to improve the welfare of the poor through bringing the social amenities closer to them at affordable price.
Taxes may also be used to curb unnecessary and conspicuous private consumption. Luxury goods are highly taxed to reduce their consumption, since high tax on such goods will make them expensive and those buying them will have to spend a large part of their income. Under such a situation, customers are discouraging from buying such goods. However essential goods must attract a lower tax rate.
Taxation may also be used to promote private savings through the granting of tax holidays or exemptions. This can lead to more savings which can then be used for investment along the desired sector of the economy. Taxation can also be used to alter production techniques and profitability of investment.
Taxation ultimately is a source of revenue to the government which may be used to monitor economic activities; reduce aggregate demand so as to reduce inflation and boost aggregate demand so as to increase purchase of goods and services in the economy.
According to Income Tax Act (1997), taxation is an important source of government revenue and an economic policy tool by government to attain economic growth. The importance of taxation therefore arises from debate of whether government should interfere in the operation of the market mechanism. Income Tax Act (1997) further noted that taxes may be levied for other reasons but revenue remain the prime objective of most taxes.
Balunywa (1988) noted that, taxation has increased in importance not only as a tool of raising revenue for the traditional role but also for accelerating the economic growth and ensuring social justices.
2.7.4 Tax Policies
The World Bank has influence many countries in under taking tax reform policies. For the case of Ghana, the tax base has remained significantly narrow since independence, leading to inadequate tax revenue. Small scale businesses are taxed differently compared to corporation/business with an annual turnover of about 50 million cedis. Medical practice, legal practice, engineering service, accounting and audit practices and tax payers even when their turn is less than 50 million cedis.
As quoted by Kitinisa (2003), there are three broad approaches to tax policies and these are:
a. Application of the standard tax provision to all business activities
b. Taxing various business activities differently to achieve economic business policy such as increase in private investment, exports/employment depending on the revenue needs, the second approval can result in a relatively high tax rate in some sector and hence induce problems for compliance and adversely affect the general investment climate.
c. Ghana has gone through a number of tax policy reforms, these include; gender, nationalization and harmonization of tax rate and tariffs, abolition of wide ranging exemptions, new tax incentives and conditional exemptions.
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