Online companies must be taxed to generate excess revenue for the country, according to expert
Mr Abdullah Ali-Nakyea, A Ghanaian tax expert in an interview disclosed that, the country is losing a huge amount of money from revenue since we are not capable of collecting them frequently and in the rightful sequence from profitable online-based businesses.
According to Mr Abdullah, we are losing such amount since we don’t have a proper and capable database for all online-based businesses operating in the country and we also lack specific tax laws that can be used to govern these sectors.
At the 2nd public lecture series which was organized by the Institute of Chartered Accountants Ghana (ICAG) in Kumasi, he made it known that, online businesses like shopping malls, food vendors, retail and other related businesses generate a lot of income in revenue and thus, if they are being taxed, it will be a positive aspect for the government.
‘’The current tax rules which were designed to address ‘’brick and mortar’’ economies appear inadequate in the tax issues posed by the digital economy.’’ He said.
He emphasizes that, taxing these online businesses it a bit harder because you can’t physically find the owner and a tax him unlike the e-commerce businesses where you tax the owners directly.
Relating to a reference by Organization for Economic Cooperation and Development (OECD) in 2018, he stated that, ‘’there will be a drastic reduction in revenue mobilization as most tax avenues are dissipated through digitization.’’
“Due to the nature of the digital economy tax authorities face the administrative issue of identifying businesses, determining the extent of their activities, collecting and verifying information and identifying customers.’’ He added
Ending his speech, he called for reinforcement of Regulation 7 of the VAT Regulation,2016 (L.I 2234). With this, each and every retailer whether the online or physical market needs to register before being allowed to establish their businesses to enable them to be billed by VAT and if anyone refuses to do so, they will be fined according to the law.
‘’A well thought and tailor-made policy will be needed to address this challenge while considering the likely international consensus to be adopted to deal with it.’’ He said.