Business News of 2014-08-11

Union Savings train SMEs on the need to pay tax

Union Savings and Loans through its Small and Medium Scale Enterprise (SME) Clinic has offered free education on the new 17.5 percent VAT/NHIL to clients.

Education on the provision of the VAT Act 2013 (Act 870) on financial services for which fees and commissions are imposed has generally been low in Ghana.

According to the Head of Policy and Programme unit at the Ghana Revenue Authority (GRA), Francis Ocran, tax first of all is a “compulsory structuring payment made by a designated person to government”.

Explaining the need for small businesses to oblige and pay their taxes, Mr. Ocran noted that the current tax threshold stands at GHC 120,000. He also used the opportunity to urge SMEs to keep proper and accurate records of their businesses to enable them file the tax accordingly.

Mr. Ocran further revealed that Ghana Revenue Authority has no immediate plans of revising the current tax threshold. “Our concern is not with the amendment of the threshold. Our concern is with implementing the new additions like the tax on financial services and real estate”, he said.

The threshold is the amount of taxable sales that qualifies one to register for Value Added Tax. The current figure at the time of proposal corresponded to the international threshold of 100, 000 dollars. However with the depreciation of the cedi, there have been speculations there could an amendment.

The head of Business Division at Union Savings and Loans, Mr. Dominic Donkorh, shared his view, saying, the essence of the clinic is to serve as a capacity building programme aimed at offering business solutions towards advancing the growth of SME’s to help accelerate the country’s development.

Union Savings and Loans Limited, one of the oldest savings and loans companies in Ghana introduced its Small and Medium Scale Enterprise (SME) Clinic in June this year.

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