IRS revises New Tax Stamp system

Accra, March 23, GNA - The Internal Revenue Service (IRS) announced on Wednesday that it had revised aspects of the implementation strategy of the new Tax Stamp System to help in revenue mobilization from the informal sector which otherwise would have escaped the tax net. The revision follows some concerns raised by various associations charged with the implementation of the tax stamps system, which includes the categorization of each identifiable group and the rate attached to the group.

Another aspect is the issue of payment on instalment to be spread over the quarter until the final liquidation of the tax liability instead of lump sum payment, which businesses said was too much for them to cope with.

Mr Kwame Adjei-Djan, Acting Commissioner of the IRS, said this at a press briefing on issues concerning the implementation of the new Tax Stamp System.

He said the Tax Stamp System was only a collection mechanism to rope into the tax net the large number of people in the informal sector, who were not contributing anything to revenue adding that it did not introduce or impose new taxes.

"It is a way of making the payment of taxes easy for those who otherwise would be subject to penalties for non-payment of their annual tax and, therefore, risked prosecution upon detection." Mr Adjei-Djan said at the moment, identifiable groups under the Tax Stamp System were: Dressmakers, Susu Collectors, Chop Bar Operators, Cooked Food Sellers, Butchers, Hairdressers, Garage Owners, Diamond and Gold Winners and Buyers.

He said with the exception of Chop Bar Operators and Cooked Food Sellers there was no 50,000 cedis rate for any of the identifiable groups.

He said many of the groups had expressed the wish to be allowed to pay 50,000 cedis flat rate.

Others have in recognition of the differences in the sizes of their businesses pleaded for the creation of another category to take care of the small size businesses alongside the tabletop and hawkers group, he said.

Mr Adjei-Djan said in view of the representations made by the various groups it had been decided to extend the 50,000 cedis category to small operators. However, it would not be applicable to all categories of persons since the sizes of their businesses differed. He said an element of flexibility had been introduced in the Tax Stamp System by ensuring that individuals within the target group could go to any IRS District Office to purchase the Tax Stamps for the quarter.

The Acting Commissioner said the Internal Revenue Amendment Regulations 2004 (LI 1803) made it mandatory for those who were not members of any association to purchase the Stamps from the Service directly.

He said no association was permitted to sell the Tax Stamps above the face value and these should not be used as a tool for collecting membership dues.

Mr Adjei-Djan said the IRS would continue to intensify its tax education to ensure that it had a high level of tax paying consciousness and voluntary compliance among the population.

Mr Harry Owusu, Executive Secretary of the Revenue Agencies Governance Board, said about 24 billion cedis revenue per annum was expected to come from the informal sector, yet only half of the amount was received.