Payment of withholding tax through GCNet from May - Yiadom

Tema, April 14, GNA -- The management of Internal Revenue Service (IRS) has decided to collect the one per cent withholding tax on imported commercial goods through the Ghana Custom Net (GCNet) collection system at the ports, borders and other entry points from May this year. The measure would replace the current system of manual charge and collection of one per cent tax on commercial import face value of imported goods by first time importers.

Mr Boakye Yiadom, IRS Chief Inspector of Taxes announced this at Tema during an interactive meeting with importers and freight forwarders under the theme "Integrating the one per cent tax payment into the GCNet system--A Faster Way of Clearing goods/imports". He explained that under the new system, the issuing of Import Tax (IT) receipts by IRS officials would cease at areas where the GCNet operated. Mr Yiadom said the banks would issue their online receipts in place of the IT similar to the Custom Excise Preventive Service (CEPS) taxes. He said a list of taxpayers in good standing with the IRS would be connected to the GCNet system that would be updated quarterly and importers and companies on the list would be exempted from the payment of the one per cent withholding tax.

However, Mr Yiadom said such importers and companies would be expected to produce valid Tax Clearance Certificate (TCC) for inspection by CEPS officials for clearance of their goods while those not on the list would be automatically charged the one per cent withholding tax by the system. He explained that for a company or importer to be in good standing with the Service, it must register, file regular tax returns and have its records audited by the Service.

In a PowerPoint presentation of the old system and benefits of the new system, Mr Patrick Danso of the Management Information Technology Unit of IRS said an IRS administrative directive issued in 2001 allowed first time importers to pay one per cent on their imports while regular taxpayers obtained valid Tax Clearance Certificates (TCC) to clear their goods. Mr Danso said, however, apart from the regular taxpayers ignoring their tax obligations and taking refuge under the one per cent tax, some taxpayers also forged the TCC while others used fake IRS receipts to clear goods making the system ineffective. He said another problem associated with the old system was delay in the clearing process as well as difficulty by officials to identify first time importers.

Touching on the benefits to be derived under the new system, Mr Danso said it would help minimize fraud, eliminate all forms of malpractices associated with the current system and reduce delays in clearing imported goods. He said the new system would enable the IRS become more effective to enhance its revenue collection.

During an open forum, some participants expressed their disappointment at the inability of management of IRS to contact them during negotiations for the new measures. They pleaded with management of IRS to desist from striking an industrial average of assessing importers, because the process had created a gap between the well endowed importing companies and the less endowed companies. "The less endowed companies in the industry turn to loss greatly as they were charged excessively beyond their profits while their rich counterparts continued to gain," they added.