Deloitte Ghana’s Gideon Ayi-Owoo Calls for Separate Tax Regime for Medium-Scale Enterprises
Tax Partner at Deloitte Ghana, Gideon Ayi-Owoo, has called for the introduction of a separate tax regime tailored for medium-scale enterprises to ease compliance burdens and foster growth.
Speaking during the NorvanReports X Space Discussion on “Enabling the Private Sector: Infrastructure, Energy and Logistics,” he highlighted the disparities in the current tax system, which places similar obligations on both the smallest and largest companies.
Call for Tailored Taxation
Mr. Ayi-Owoo emphasized that medium-sized enterprises, such as small-scale manufacturers or retailers, are burdened by a tax system that does not account for their unique operational challenges.
He cited the example of Ghana’s Value Added Tax (VAT) regime, noting that businesses are required to remit VAT within 30 days of invoicing, even if payments from buyers, such as large retailers, are delayed by 60 days.
“The current structure disadvantages smaller businesses that lack the financial muscle of larger corporations,” he stated. “A more accommodating regime would not only simplify compliance but also enable these businesses to thrive, contributing significantly to employment and economic growth.”
Energy Costs and Renewable Solutions
Addressing energy challenges, Mr. Ayi-Owoo urged the incoming government to explore strategies to reduce electricity costs, such as introducing off-peak tariffs and increasing investment in renewable energy sources like solar, wind, and hydro.
He emphasized the importance of renegotiating power agreements and prioritizing cleaner, cheaper energy to bolster economic competitiveness.
Improving Tax Administration
Mr. Ayi-Owoo also underscored the need for reforms in tax administration, advocating for a more transparent and business-friendly approach by the Ghana Revenue Authority.
“Businesses should have access to fair and affordable appeals processes to resolve disputes, ensuring that tax audits and assessments do not stifle operations,” he noted.
Broader Economic Implications
The tax expert further warned against over-reliance on higher tax rates to increase the tax-to-GDP ratio, cautioning that such measures could “kill the chicken that lays the golden egg.”
Instead, he called for efforts to simplify the tax regime and bring more informal sector players into the tax net.
“A simplified tax regime would encourage compliance, enabling businesses to grow and expand. Taxation should not be a hindrance but rather a tool for sustainable development,” Mr. Ayi-Owoo concluded.
The discussion highlighted the critical role of structural reforms in taxes, energy, and infrastructure in creating a conducive environment for private sector growth, particularly as Ghana looks to stimulate economic recovery.
