“Come down from where?” I asked the businessman who had grasped what he thought was his opportunity to get a message across to the whole country. (That was his hope, anyway!)
“Well, it seems to me that the Government is very concerned with high-high things. You know, the annual percentage growth of the Gross National Product; the ratio of external debts to Gross Domestic Product; the building of a national cathedral; "priority" issues of “great importance,” the businessman explained.
I asked him: “And what do YOU classify as things of great national importance?”
“Things are hard,” he said. “Businesses are NOT making any money. And when businesses are not making money, they can’t pay workers or when they can do so, they can't increase salaries to encourage productivity; and when workers do not get paid what they consider a fair rate, they don't purchase anything and the markets get stuffed with unsold goods. And when unsold goods fill the markets, it signals that there is POVERTY all over the place. Including the public chest.
"Look, if you like, you go into Accra town and look around. Go to the markets and ask the sellers. They are your best index when it comes to assessing the effect of overall economic policy on the populace as a whole.
"The Government is concerned with macro-economics and so on. Very good. But the effect of those long-term plans can’t be felt now. Out in the market, here and now – things are quite hard. Very hard. ”
I countered that he was still being somewhat vague. “Things are hard”? People would always say that when things were not going THEIR way. “Market women haven’t been selling as much as they would like to? But market-women always complain about that! Was it not the same market women who use4d to hoard goods and claim that "The owner is not there!" when customers they weren't sure of, approached to buy things or asked for their price?"
“All right, let me be specific,” the businessman seemed to give in at last. “In my own line of business, the Ghana Revenue Authority has been clamping down very hard on taxes that businesses should be paying to it.One company is being asked to cough up 37m Cedis or so. In one go! Similarly large fines are being imposed for failure to pay….”
“Ahah!” I interposed, “So that's your beef? Look, aren't some of those taxes moneys that are not -- strictly speaking -- the property of the businesses that are holding on to them? Is this not the scenario?: "Someone buys something. There is a tax on the thing. But the tax goes initially into the account of the enterprise that sells the thing. But that tax was not imposed for the business to collect and keep, was it? The money must be sent on to the Government! But some of you guys want to keep that money as long as possible and use it -- tax money though it is -- as part of your capital and make more profit on it! But the Government has got wise to this and says, “Give me that money right on the officially-scheduled deadline, so that I too can use it to do things that will profit me – such as building schools or digging wells! And you guys don’t like that one bit! We've got people at the Ministry of Finance who know all the tricks and it's biting you!"
The man retorted with some heat: “Half the money they chase us for, doesn’t even reach the Government at all!” he shot back.
“Ah? How do you mean?” I asked. “Well, suppose I owe 10 million Cedis and I tell the revenue man I can only pay 5 million; and he says: “If you want to pay only 5 million, then you must settle me with 50,000 so that I can accept your terms, do I really have any choice?” He wiped the sweat off his forehead. "The guy wants to chop! And I too want to chop. We just have to come to an understanding!"
“But if you know he will demand 50,000 if you only pay half of what you owe to the Government, then why not pay all the 10 million you owe? If you give him no room to demand a bribe, he just simply can't demand one, can he?”
“You don't understand -- what I am trying to tell you is that I would pay the bribe because I haven’t got ten million Cedis, for God’s sake! Neither today nor tomorrow. I told you things are hard on the market!”
“Isn’t there a mechanism for appealing against demands for huge tax settlements? In some countries, they do have Tax Commissioners to whom you can appeal if your annual tax assessment appears to you to be too large. You can also appeal to them to be allowed to pay in affordable instalments, whatever is agreed upon. Isn’t there a similar system in operation in Ghana”?
“You will have to pay them, too, if they are to accept your conditions!”
(WE ALL LAUGHED SO UPROARIOUSLY AT THIS THAT PEOPLE BEGAN TO STARE AT US!)
“That’s why I said the President should 'come down small', the businessman pursued. “We have to be realistic about the Ghana situation.The mechanisms may be there, but they are operated by people, aren’t they? And doesn’t everyone want money in Ghana today? You legislate to give the GRA power to bring in money. And they use that power to fill their own pockets! What can you do about it? You may be happy because you think they are bringing in a relatively greater amount of revenue than before, but in fact, they are only getting rich on the side. Your blind side!”
(MORE LAUGHTER) “So what should be done?” “I say: Let the Government sit down with the business community. Ok, some are crooks, but believe me not all in the community are dishonest, and they will point the right way to the Government, if they are listened to. Look, say the tax on "Product A" is 20 percent. This means that if one sells 100 "Product A’s", one pays 20 Cedis on it. Now, if an enterprise sells 1 million "Product A’s", the tax becomes 200,000, doesn’t it? Every business enterprise would tell you that it is extremely difficult to have 200,000 Cedis in ready cash on hand to give to a revenue collector on demand. You have to consider that some of the sales that fetched the 200,000 Cedis tax might have been conducted on the basis of credit to hitherto good customers, who might not have been able to settle their debts as quickly as promised, this time! There's no-one in business who hasn't suffered "promise-and-fail" -- even from the most respected customers -- before!"
HAHAHAHAHAHAHAHAHAHHAHA! ..… "But if, on the other hand, the sum owed the GRA was only 100,000 Cedis, paying it would be relatively easier to settle it.”
"Theoretically!" I shot in. (HAHAHAHAHAHAHAHAHA!) “So you want to say that the demands of a more liberal tax regime would be easier to comply with?”
“Yes, a thousand times yes!” the businessman affirmed. “First of all, the temptation wouldn’t arise to pay the collectors a bribe, because if one can easily settle the debt, then what's the point of bribing someone to accept conditions you don’t need to offer? Secondly, if the tax is lower, sales can rise in volume, and when sales volumes are high, enterprises enjoy better liquidity and so can more easily settle their obligations to the taxman!”
“So, in effect, when you say “The President should ‘come down small’, what you are really saying is that taxes on businesses should come down!?”
(AGAIN, WE LAUGHED SO MUCH THAT WE BECAME the OBJECT OF CURIOSITY TO THOSE NEARBY.)
The man said, “You are laughing, but many a wise thing is said in jest. When things are too “tight”, they create a defeatist mentality in people which makes them say, “I can’t do it. The atmosphere is not right.” On the other hand, when things are fairly loose, then the imagination can be liberated. “Oh, I can expand that warehouse! Oh, I can employ 10 more people! Oh I can….”
Yes, we can!” I yelled. (WE LAUGHED SO MUCH AT THIS THAT WE NEEDED TO ASK FOR TISSUE PAPER TO WIPE THE TEARS FROM OUR EYES.)
But even as we laughed, we couldn’t forget that “Yes we can!” brought a Black man into the most powerful seat in racist America. In case you forget, “Yes, we can!” was ex=President Barack Obama’s campaign slogan.
So, Ghana’s economic managers, over to you. The IMF will forbid you from liberalising, because (the IMF will say) your debt/gdp ratio will stay high. But don’t pay too much attention to that. Ask the IMF how much the Western economies pumped into their “robber-banks”, by way of “quantitative easing”! If harsh economic realities can be “eased quantitatively” for the private enterprises of the West -- banks, insurance companies, home loans institutions -- why can’t we too be allowed a small leeway to engage in "quantitative easing", when austerity begins to bite us? After all, we haven't engaged in any dishonest binges of the sort that brought about the sub-prime-mortgage disaster of 2008 that cost the Western exchequers trillions of dollars? [To read more about "QE" (quantitative easing), go to How the world’s greatest financial experiment enriched the rich
So, Dr Bawumia and Co., please be bold! Yes, you can!
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