Former Finance Minister and current Presidential Advisor on the Economy, Seth Terkper, is calling on policymakers, businesses, and the political class to give Ghana’s tax policies the time and consistency they need to work.
Seth Terkper, who is also a tax expert, is bemoaning the frequent changes that have characterized the country’s tax regime and administration.
He argues that the constant policy reversals, driven by political cycles and leadership changes, undermine the effectiveness of tax reforms and make compliance more difficult, especially for small businesses.
The presidential advisor, who was speaking at the Ghana Revenue Authority’s (GRA) event in Accra, explained that the newly modified tax system, which is a reintroduction after ten years, is not just another policy experiment but a deliberate effort to simplify the tax process for small businesses.
He explained that the system combines both income tax and VAT obligations into one calculation based on sales or turnover. He further stressed that this approach eliminates the cumbersome record-keeping and complex refund processes that often discourage compliance.
“It has been mentioned that the modified tax system is actually a reintroduction after 10 years. It was part of what was to be the revised income tax act, but it was repealed again. In actual fact, it replaces, and let’s emphasise, it represents the obligation of small businesses for the VAT calculation and for their income tax calculation,” he explained.
The former Finance Minister continued that, “the idea was given the complexity involved in assessing income tax, keeping records of income, keeping records of expenditures, which is very cumbersome for small businesses. On the VAT side, keeping records, the same records, and calculating your refund, your credit, and everything.”
Seth Terkper reminded stakeholders that simplification of tax systems for small businesses is a global practice and that Ghana must avoid abandoning sound tax measures each time a new administration, minister, or commissioner assumes office.
He recalled how the presumptive income tax system and later reforms under President Mills sought similar goals of easing compliance and unifying tax administration, yet were repeatedly repealed or restructured.
“I have one appeal, which is to our MPs, to our executives, to business, and to all stakeholders, to help us sustain our tax policies and measures. I’m appealing that we allow policies to be sustained over a period instead of changing them, whether with a political cycle, with a commissioner general, with a minister, or whatever. This is a global practice. Most countries are simplifying their tax systems for small businesses to be able to comply,” he appealed.
In his view, sustaining tax policies over time would not only build public trust but also give small businesses the stability they need to plan, grow, and contribute more effectively to national revenue.
For Ghana’s tax system to truly serve its purpose, the former Minister for Finance believes it must be allowed to breathe.
