Ghana Revenue Authority clarifies new income tax law
The forum created a platform for tax consultants, tax professionals, accountants, Ministry of Finance and others in the businesses community, to deliberate on the new law to enhance understanding.
Mr George Blankson, the Commissioner General of the Ghana Revenue Authority, said, there is the need to open up for scrutiny and clear some misconceptions about the new tax law.
He said the main reason for the passage of the new income tax law is to revise and consolidate the many scattered tax laws and amendments in to one document, simplify the provisions of the Act and make it more user-friendly to enhance efficiency and facilitate compliance.
He said the agenda for the forum is to work together to ensure that rough edges are smoothened for effective implementation.
Mr Edward Gyambrah, Deputy Commissioner Policy and Programmes, Domestic Tax Revenue Division, in a presentation on the various aspects of the new income tax law, said Capital Gains Tax is no more a separate tax on its own.
He said gains realized on disposal of assets (“now called gain on realisation of an asset”) or liabilities were to be included in business or investment income and taxed at the applicable income tax rate.
Also, Gift Tax is also no more a separate tax on its own adding that gifts received in respect of employment, business and investment are to be included in calculating the gains and profits from employment, business and investment, he said.
Mr Gyambrah said mortgage interest which previously was available for more than one residential building for individuals will now be restricted to just one building during the life time of that individual.
He said the law also allow for deductions for repairs and improvements, while research and development expenses may also be deducted irrespective of whether or not they are of a capital nature.
Mr Gyambrah said the Act 896 exempts from tax, gains made from realization of assets from merger, amalgamation or re-organization where there is a continuity of at least 50 per cent of the underlying ownership.
He said while in the past a Private Ruling is binding only on the Commissioner General, the new Act makes such ruling binding on the applicant as far as the transaction in respect of which the ruling is given is concerned.