The Survival and Growth of Small - Medium Size Enterprises in Ghana

The government of every country has to draw up plans as to its expenditures for the coming year and how to generate revenue to meet these expenditures. This means that the government has to come out with a budget for the year. A budget is a statement of the government’s planned income and expenditure for the year. The budget spells out the expenditures and the incomes that the government expects in the year to meet these expenditures and the measures, usually taxes, that it intends to put in place to generate such income. In recent years, Ghana’s national budgets have addressed the issue of increased productivity and poverty reduction. The 1998 budget statement outlined a number of actions aimed at reducing poverty. These actions included improving access to basic services through increased budgetary allocation to basic education, primary health care and rural infrastructure. The actions also included the provision of free medical attention for infants, the aged and pregnant women as well as training and development of skills for women and re-deployed people. These actions continued in the 1999 financial year as indicated in the 1999 budget statement.
Ghana’s sources of revenue to meet government’s expenditure include aid in grants and loans from foreign and domestic sources, miscellaneous sources and, most importantly, taxes. Most of these sources are limited in the amount they can generate. The country, therefore, relies greatly on taxation to generate the required revenue. Taxes are charges levied on individuals and companies under an Act of Parliament to meet public expenditure. Ghana’s tax system comprises both direct and indirect taxes. The direct taxes comprise individual and corporate income taxes, capital gains tax, gift tax, stamp duty and petroleum and mining taxes. Indirect taxes in Ghana comprise the value-added tax, customs duties, excise duties, and other similar taxes.
Parliament has passed various laws to give legal backing to...