Monday, 26 February 2018

Tax amnesty guidelines to be announced next week

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Adnan Adams Mohammed

The Ghana Revenue Authority (GRA) has begun the process of drawing up guidelines that will encourage voluntary tax compliance.

Parliament, during its final meeting last year, passed the Tax Amnesty bill as part of plans to improve voluntary tax compliance.

The law is expected to grant amnesty by readjusting the penalty to be paid by persons who fail to register with the Commissioner-General or file tax returns or pay their taxes as required by law.
The law is also in line with governments’ policy to decrease taxes on production, in order to lower the cost of production and increase financial liquidity for the economy’s productive sectors.

The Technical Advisor to the Commissioner-General of the GRA, Henry Yentumi has said, “The administrative guidelines to go along with the tax policy are just in the final stages of preparation. Within the next five to ten days, at the very latest, you will get full guidelines telling everybody what the tax amnesty is, what their rights under the policy are, their rights of appeal and the processes that are going to be applied, importantly, to make sure that they are able to take advantage of the policy.”

Mr. Yentumi is confident the move should help in meeting government’s revenue target for the year.

But, businesses have expressed mixed reactions to the new Tax Amnesty policy being implemented by the Ghana Revenue Authority (GRA).

Some have cast doubt over the policy’s ability to reduce tax evasion while others believe the policy could increase tax compliance.

Passed in December 2017, the tax amnesty bill seeks to improve voluntary compliance among taxpayers.

Under the law, defaulting businesses will be allowed to pay a revised tax obligation that they had been in default for a period of time.

The current law is expected to last for nine months, from January to September 2018.

This year’s amnesty period will be the third time that the GRA has implemented the policy over the last decade.

Nana Osei Bonsu, the CEO of the Private Enterprise Federation have expressed skepticism about the exercise. He said, the absence of a significant positive outcome of a similar exercise carried out in 2013, is likely to impact on the objective this time around.

“If we are going to do this time around, let’s review from the businesses’ perspective; why did you fail to comply, what happened to you; how is the situation affecting you, etc. because that is the area where we can actually bring value as voluntary tax compliance limits the cost of tax administration,” he stated.

Also, Isaac Nketiah Sarpong, a Tax Consultant with Ernst and Young has emphasized that, knowing the reasons for the non-compliance should help identify further mechanisms to correct the trend.

“The OECD reported somewhere in 2016 that only 69 companies actually showed up to be registered when the Amnesty was passed in 2013. But as at now, we do not know how much came into the kitty as a result of the amnesty so these are things that I think should have been number one on the board of the GRA.”

But, Mr. Yentumi reacts to the concerns saying that, the outcome should be produced as soon as possible which will influence the outcome of the existing amnesty rules.

“GRA is still working on not just administrative guidelines but still looking forward to what kind of information was available from the previous tax amnesty issued in 2013. But admittedly the information has not been readily available and there have been some slowness in getting some of these things out,” he explained.

The GRA officer also disclosed that the GRA is working on an enhanced automation process in collaboration with SSNIT, Registrar-General, and Ghana Ports to ensure the setting up of a data warehouse and data mining – with regard to gathering information on imports and exports.

He explained that: “It is going to be difficult not to have a 360-degree view of the tax payer, because if you have a TIN identification number to present in all your dealings, you have a situation where you go to register a company and we are actually linking the data through the data warehouse to GRA records; you have a situation wherein the ports now have a paperless system. So, the whole idea of manual system is going away; automation enables us to pay by mobile money, and in various ways we are ensuring that we have a way of checking non-compliance and ensuring everybody meets their tax obligations”.

The GRA has said it is determined to drive publicity and increase stakeholder engagement, as well as write directly to all companies and get the infrastructure available to make the tax amnesty work – and get people who would normally not come to file taxes to do so in order to broaden the tax net.

The GRA generated US$7.6 billion last year, as against US$6.9 billion in the last 10 years from its tax amnesty.

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