Taxpayers Determine Taxes

Self assessment would soon be the norm for all taxpayers in the country under a new tax regime.

It would allow taxpayers to decide how much they would pay as taxes to the state.

The Ghana Revenue Authority (GRA) on Tuesday told journalists in Accra that it would roll out a self assessment practice from January 2013 for some selected companies ahead of the full implementation of the new regime for all taxpayers in the country by 2015.

At a media interaction in Accra, George Lamptey, project manager for self assessment, noted that it would enhance efficiency in the nation’s tax system.

He explained that self assessment assigns the responsibility of computing and reporting tax liabilities to Ghana Revenue Authority to the taxpayers.

The new tax regime is to replace the old practice of administrative assessment under which tax administrator were solely responsible for assessing taxpayers and billing them.

The taxpayers would be required to estimate their taxable income for the year of assessment which they report to the revenue authority.

“In the past tax administrators determined how much the taxpayer paid and this resulted in a lot of conflicts but the new regime allows taxpayers to determine, declare and pay their taxes within specific periods,” said Mr Lamptey.

He stated that though taxpayers would be required to fulfill their tax obligations by computing their own liabilities and submitting the self assessed returns to the tax administrator, they would be subjected to verification for accuracy through risk assessment.

“The taxpayer is expected to make a truthful declaration while the administrator is also expected to deal with it in all fairness,” said Mr Lamptey

The Self Assessment Project Manager pointed out that taxpayers are allowed to estimate their chargeable incomes before the beginning of the year which could be revised in the course of the year if it is detected that the initial estimates were incorrect.

He was optimistic it would improve revenue generation as it would not only encourage voluntary compliance by taxpayers, but also ensure greater equity and fairness in the tax system.

Though the laws are being revised, Mr Lamptey said taxpayers, who deliberately provide inaccurate or false information in the self assessment return forms, would pay at least 30 per cent of the amount stated as penalty.

As part of the modernization of the tax system in Ghana, he said the revenue authority was setting up client services units to address the concerns of taxpayers as well as use ICT to pay taxes online.

Comfort Boohene-Osafo, Commissioner of the Domestic Tax Revenue Department of the GRA, expressed the hope that the new system would boost confidence in the tax system and its administration in the country.

She noted that it would elicit voluntary compliance and allow resources to be channeled to other areas.

Nii Ayi Aryeetey, Deputy Commissioner, Policy and Programmes, explained that the law makes room for refund provided all liabilities are satisfied.

Non availability of funds, poor record keeping habits by taxpayers and internal and external stakeholder resistance to change have been identified as factors that could hinder the success of the self-assessment regime.