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Business News Wed, 3 Aug 2016

GRA develops manual on new tax law

The Ghana Revenue Authority (GRA) is developing a manual on the new Income Tax (Act 896, 2015) to make it easy for taxpayers to understand the provisions of the law.

The manual, known as Practice Note, which will contain examples of how to calculate taxes, is expected to give directives on how aspects of the law will be implemented.

Addressing the opening session of a day’s seminar for taxpayers under the Adabraka Medium Taxpayers Office (MTO) in Accra, a tax consulting, Mr Francis Edward Kinsgross Akoto, said the manual would guide taxpayers and also make compliance with the tax laws easy.

The seminar, which was organised by the Adabraka MTO, was aimed at educating stakeholders, including representatives of tax consulting firms and taxpayers, in the jurisdiction of the Adabraka MTO.

While taking the participants through highlights of the new Income Tax Act, Mr Akoto, who is also the Chief Executive Officer (CEO) of FEKA Consult, said the objective of introducing the new tax law was to consolidate all tax laws and simplify provisions of the law.

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Apart from facilitating compliance, he said, the new law was also to broaden the tax base and remove all distortions in the old Internal Revenue Act (Act 592).

The participants started murmuring when Mr Akoto mentioned that under the new law, employees who benefited from soft loans from their employers would be taxed.

While the participants discussed among themselves the rationale for such a law, he explained that loans amounting to three months’ basic salary of an employee would not attract tax if the repayment was done in 12 monthly instalments.

However, he said, loans amounting to more than three months’ basic salary of an employee would be taxed.

Additionally, he said, incomes of resident persons earned in Ghana and outside the country would be aggregated and taxed accordingly.

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He explained that the law had made provision to avoid double taxation, as taxes paid outside the country would be accredited to the taxpayer.

In a welcome address, the Managing Director of the Adabraka MTO, Alhaji Guduba Saladin Amadu, said taxes played a very important role in the development of every nation and citizens were to play their civic role of honouring their tax obligations.

He said most countries had moved from the use of force to ensure that taxpayers fulfilled their tax obligations and the GRA expected all taxpayers to fulfil their obligations without the use of force or threat of punitive sanctions.

Taxpayers, he said, must make correct tax declarations, file returns and also make payments on the due dates.

Source: Graphic.com.gh