Speedy enactment of the draft tax administration bills into law will help rationalise and consolidate the tax rules and administration in the country, Dr. Abdul Baasit Aziz Bamba, Lecturer-in-law at the Faculty of Law, University of Ghana has proposed.

The bill, when passed will facilitate the process of addressing administration issues arising from the merger of the three revenue collection agencies.

Some of the gaps, conflicts and ambiguities identified in the taxation of petroleum legislation are likely to be addressed in the internal revenue bill, when passed into law.

Dr. Bamba was delivering a paper at a tax forum in Accra under the topic: ‘Harmonizing Tax Legislation For Effective Tax Compliance; Recipe For Revenue Mobilisation’.

He mentioned that conflicts, gaps and ambiguities in the tax regime for natural resources create numerous opportunities for under-assessments, tax avoidance, and plain corruption which is due to the standardless discretion in tax assessments accorded revenue officers.

He added that there are a number of uncertainties in the legislative framework as regards the tax rate in the Minerals and Mining Act, 2006 (Act 703).

Section 25 of the Minerals and Mining Act, 2006 (Act 703) provides that, ‘A holder of a mining lease, restricted mining lease or small scale mining licence shall pay royalty that may be prescribed in respect of minerals obtained from its mining operations to the Republic, except that the rate of royalty shall not be more than six percent or less than three percent of the total revenue of minerals obtained by the holder’.

This, he said, is a sliding scale with no specific assessment mechanism and that, this can be filled by regulations to be made pursuant to the country’s Minerals and Mining Act, yet these corrective regulations are yet to be made.

Again the Minerals Royalties Regulations, 1987 L.I 1349 which seek to guide the Ghana Revenue Authority in the computation of royalties due the government under the old Minerals and Mining Act, 1986 (PNDCL 153) has not been so revised in tune with the new Minerals and Mining Act, 2006 (Act 703).

Dr. Bamba, indicated that there are no regulations to guide revenue officers in the proper computation and administration of royalties from mining activities.

This raises substantive structural legal problem in the application of Act 703, and by extension, poses a challenge to the general utility of the specific legal regime that exists to establish a connection between tax revenue, natural resource and development.

Outlining the effect of gaps, conflicts, uncertainties, and ambiguities in tax laws, observed that good tax system include equity, certainty, convenience, economy and simplicity.

He stated that deficiencies in the tax law such create situations for the unfair treatment of taxpayers because of the dynamics between taxpayers and administrators.

“Tax may be imposed on taxpayers when they have not had adequate notice as to what they are required to pay to enable them accordingly plan their tax affairs.

“Uncertainty in tax rules disables taxpayers from determining their true liability with a fair degree of accuracy. The effect of uncertainty is that taxpayers cannot ascertain how much tax is due and owing from them.

“In the result, taxpayers often are at the mercy of tax administrators who may exercise discretion in the application of tax rules that are unclear or are filled with gaps and inconsistencies,” he remarked.