GIVE UNTO CAESAR WHAT IS CAESAR'S (MAY 7, 2009)

ONE of the key constraints to the accelerated development of the nation has been the comparatively low revenue base of the economy.
This, in part, is explained by the fact that only a small section of the productive sector of the economy, principally the formal sector, is captured on the records of the Internal Revenue Service (IRS) and, therefore, carry the disproportionately larger burden of tax. The larger number of income earners who are not captured in the tax net obviously do not pay taxes.
Given the rather extremely low voluntary tax compliance levels in our society and the lack of logistics by tax collection agencies and a system to consistently enforce compliance with tax laws, the nation ends up collecting lesser tax revenue than it otherwise would have.
One of the handiest prescriptions for dealing with this low collection of tax revenue is the widening and broadening of the tax net. In other words, the large number of those who are not caught in the tax net should be captured and taxed accordingly.
Over the years, efforts have been made by governments to rope more people into the tax bracket in order to expand the national revenue base.
Even though these efforts have registered some positive results, a lot more individuals and groups are still let off the tax hook.
One noticeable group, in this respect, has been the religious bodies.
While the country’s laws, principally the Constitution in Article 94, do confer some tax exemptions on religious bodies, this has been misconstrued as a total and open-ended exemption which, therefore, entitles any religious body, even if it is engaged in profitable and productive business, not to pay tax.
Evidence abounds in our society of many religious bodies, especially churches, engaging in serious business activities in which individuals and the church itself earn not only good income but also handsome profits.
In the name of religion, and under the guise of doing charitable work for God and man, these institutions and individuals who earn incomes like the heavily taxed labourer or civil and public servants in the formal sector do not pay even a pesewa as tax.
We believe that these categories of entities and individuals qualify to pay tax and that if they have been let off the hook in the past the time is now to rope them into the tax net.
Indeed, many of these entities and individuals earn more income and make more profit than their counterparts in the formal sector who are taxed to execute social projects which are beneficial to all.
We, therefore, wish to lend our total support to the Commissioner of the IRS, Major Daniel Ablorh-Quarcoo, in his effort to rope in religious institutions and individuals earning income and profit to pay tax (see pages 24 & 49).
The nation, in addition to its traditional problems, today has a global economic downturn and unprecedented deficits to deal with and it is only through the widening of the tax net that more revenue can accrue to the government for it to execute projects such as infrastructural development and other programmes for the benefit of all.
The religious bodies, in conformity with the Gospel, should “Give unto Caesar what is Caesar’s and unto God what is God’s”.