GRA now running self-assessment regime – Asare
The Ghana Revenue Authority (GRA) has called on its clients to correctly carry their self-assessment obligations and file the appropriate returns when due, stressing that the Authority will no longer carry out desk audits for its clients.
Speaking to the GNA at a day’s seminar organised by the Osu Medium Taxpayers’ Office (MTO) for taxpayers and consultants, Mr Joseph Asare, Head of Audit at the Osu MTO, said since the coming into force of the new Income Tax Act, Act 896 in January 2016, taxpayers were required to file tax estimates for the year to the GRA and also determine the amount of tax to be paid, based on their own assessments.
The estimates are then divided into four and payments made at the end of every quarter and the taxpayer can revise these estimates at any point in the year, up to December 31.
He said the GRA in employing the self-assessment method did not expect 100 percent accuracy and therefore allows a 10 percent margin of error; the final declaration should be at least 90 percent correct.
“If you are 80 percent correct, it means you were not truthful in your declaration because you had up to even 31st December to alter it. We want that you will be 90 percent truthful with us and pay the taxes alongside” he stated.
He said the GRA would come to the taxpayer’s premises to audit the estimates and declarations that has been submitted to it in order to verify what has been submitted. He noted that where a taxpayer was found to have been untruthful in his or her declarations, sanctions will be applied.
These sanctions include penalties for under-declarations, interests on the tax payable, imposition of a triple penalty of the tax where the under-declaration has been wilful, and in some cases prosecution at the law court.
Mr Lawrence Hotsonyame, who took participants through portions of the Income Tax Act 896, tax reliefs and capital allowance provisions in the Act, said income, under the Act was categorised into three main classes: employment income, business income and investment income, which now includes lottery winnings.
He said the aggregation of these three streams of income makes up a taxpayer’s assessable income, while chargeable income is the assessable income minus allowable deductions.
Mr Hotsonyame said such allowable deductions under the new Act include interest payments on loans for production of income, repairs and improvements, research the , capital allowance, losses on the realisation of assets and liabilities.
He said it also allows all taxpayers to carry forward losses from business or investment, up to three years and five years for priority sectors.
Mr Lawrence Hotsonyame said that the new Act gave taxpayers more relief in this regard, adding that it also increased the debt-to-equity ratio for companies from 2:1 to 3:1. He also highlighted that side the reliefs enjoyed by institutions and companies, individuals were also entitled to some personal reliefs which they can either claim upfront or at the end of the year, depending on the type of relief.
He said these personal reliefs include marriage and responsibility relief for individual with a dependent spouse or at least two dependent children in the sum of GH₵ 200 per annum, Disabled- elief-25 percent of Assessable Income from business or employment, old age relief (GH₵100), child education relief up to three children, GH₵200 per child, aged dependents (GH₵100 cedis each), cost of training relief (GH₵400 per annum) and mortgage interest relief.
He said when taxpayers who are eligible for any these personal reliefs claim them, it may move them from a higher tax bracket to a lower tax bracket.
Source: GNA