The Osu Medium Tax Office (MTO) of Ghana Revenue Authority (GRA), has held an educational seminar for taxpayers in its jurisdiction on aspects of the tax administration, with a view to encourage voluntary compliance.
The day’s seminar sought to educate participants on Self-Assessment, Withholding Tax, Rent Tax and the New Value Added Tax (VAT) ACT 870 and returns submission.
Mr Ahmadu Salladdin, Assistant Commissioner MTO, said the success of tax administration in encouraging voluntary compliance depends to a large extent on taxpayer awareness, thus the need for such educational seminars.
“We do not want to wait for you to fall foul of the law and then jump at you with our enforcement tools. This seminar is therefore opportune in our collective efforts to increase your awareness of tax administration issues,” he stated.
Mr Joseph Asare, Head of Audit of the Osu MTO, said self-assessment which is currently being practiced was based on the idea of voluntary compliance and is convenient for taxpayers to comply with.
He noted that unlike the old regime where the Commissioner General assessed and fixed the tax rates for taxpayers, which were usually met with objections by the taxpayers and subsequent delays in or outright non-payment of taxes, the self-assessment regime allows the taxpayer, who has all the information of his or her company or companies to assess and declare how much tax to pay.
“The role of tax administration under self-assessment is to assist taxpayers to understand their rights and obligations under the law,” he said.
Mr Asare said in line with the need for laws to be clear and simple for taxpayers and administrators to understand and comply with, the current income tax law is to be re-written in clear and simple language, to replace the technical one.
He took participants through the self-assessment processes and penalties for underestimation of income and taxes due and how the penalties are calculated.
He said the GRA is more interested in revenue mobilisation through payment of taxes than penalties and interests.
He explained that the penalties and interests on deviations are not revenue collection tools but that of compliance.
Mr Asare urged the participants to accurately comply with the provisions of the laws on taxes in order to avoid payment of penalties and interests.
Mr Alfred Adjah, Supervisor, Taxpayer Services Unit of the Osu MTO, also schooled participants on the importance of filing their tax returns, types of tax returns, due dates for submission of returns and payment of due tax and sanctions applicable for failure to submit or late submission of returns.
He also highlighted some new areas under the Amended VAT ACT 870 of 2013 which replaced the old Law: Act 546 of 1998.
He said although basic concepts like taxable supply, zero-rated supply, exempt supply, relief supply, Output and Income Tax, some new items have become taxable and vice versa under the Act and the VAT (Amendment) Act of April, 2015.
These new areas include Rate of VAT where the total rate, including VAT of 15 per cent and NHIL of 2.5 per cent is 17.5 per cent, while the VAT flat rate; to be paid by real estate developers on their immovable property is five per cent.
Also, the threshold for registration under the Act is now GH¢ 120,000.00 or less over 12 months, promoters or organisers of public entertainment must register within 48 hours while auctioneers must register within 30 days of becoming an Auctioneer.
Other new areas that are now taxable include some financial services, repossession and lay-away agreements, transportation and real estate goods and services like gym and spa services, musical instruments, supply of computers and compact fluorescent Lamps are now tax exempt.
Pharmaceuticals, paper for manufacture of text and exercise books, mild carbon steel for manufacture of machetes, hostel/similar accommodation and life insurance and reinsurance are also exempt.
Mr Adjah urged taxpayers who have issues with any tax matter to visit the GRA’s Domestic Tax Revenue Division offices for clarification in order to be compliant as this helps to put their businesses in a good light for their customers.