The Impact of the Establishment of the Large Taxpayer Unit (LTU) by the Revenue Agencies Governing Board on Tax Revenue in Ghana
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Date
2009-06-07
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Abstract
Every country relies on tax revenue to run its economy. In Ghana, as part of the tax restructuring process, the Revenue Agencies Governing Board established the Large Taxpayer Unit (LTU) as a means of enhancing revenue collection from few traders who account for a large percentage of total tax collection.
After four years of operations this research was to establish:
• The impact of the LTU on tax revenue in Ghana
• Its performance in relation to the performance of the other revenue agencies,
• Public perception about their operations and identify some of the problems they” have encountered over the period.
Using simple random sampling, some of the businesses operating under the LTU were selected .Using questionnaire with both open and closed ended questions; their impressions about the performance were sourced. LTU staffs were also interviewed. Data was obtained from the research unit of Revenue Agencies Governing Board (RAGB), and the LTIPS (Large Tax payer Information Processing Unit). Revenue performance of the LTU and the other revenue agencies were also gathered. Expert knowledge was gathered through interview from some management staff of the LTU and the other revenue agencies.
It was found among other things that:
Revenue has been increasing over the period but increases in indirect taxes far outweigh that of direct taxes.
Percentage growth in collection of the LTU for the first three (3) years was lower than those experience by the other revenue agencies. Performance in 2007 and 2008 showed signs of improvement.
Although the LTU has introduced a joint audit system and traders have a one stop centre
in dealing with their tax issues, there is relatively low level of change in the perception that businesses have about the LTU. Whilst others saw the LTU established as an improvement in procedure, others still had their reservation especially with long hours spent submitting returns of the various tax types delay in processing refund claims, tax clearance certificates and providing information. They perceive staff of the LTU as the same as those in the other agencies. They however, attest to the LTU staff high competence.
Although it is a new institution, it is grappling with institutional rivalry, inadequate staff and logistics, inadequate funds. One major problem affecting the LTU is its lack of autonomy therefore suffering interference from the mother agencies
The problems being encountered should be seen as teething problems and sponsoring agencies should help to resolve them.
Description
A Thesis Submitted to the Business School, Kwame Nkrumah
University of Science and Technology in partial fulfilment of the
requirements for the degree of Master of Business Administration, 2009