Commissioner-General of the Ghana Revenue Authority (GRA), Emmanuel Kofi Nti has cautioned that the GRA will go tough on all tax defaulters and evaders after the end of tax amnesty.
The last day for the submission of applications for the tax amnesty is August 31, 2018, and he is reminding businesses and all income-earning persons that after the end of the expiry date, the GRA will go after all persons who failed to take advantage of the opportunity.
Consequently, he said, the appropriate sanctions will be meted out to tax evaders and defaulters, to ensure that all citizens contribute their quota to nation building.
Kofi Nti added that churches that run businesses will be taxed.
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According to him, many church leaders or â€˜ownersâ€™ leverage on their churches and establish other businesses apart from the church, which generates enough money for them, therefore such businesses will be taxed just like others whose businesses are not affiliated to any religious organisation.
The Commissioner-General gave the caution at a press briefing in Accra yesterday on the implementation of the new tax policy measures introduced by the Minister of Finance in his Mid-year Budget Review and educate the public to understand.
He explained that the tax policy measures are the restructuring and delinking of the National Insurance Levy (NHIL) and the Ghana Educational Trust Fund Levy (GETFL) from the main Value Added Tax (VAT), and the introduction of a new band in the personal and income taxes.
Parliament has passed the followings Acts into law: VAT (Amendment) Act, 2018) (Act 970), the National Health Insurance (Amendment), 2018 (Act 971) The Ghana Educational Trust Fund (Amendment Act), Act 2018 (Act 972) and the Income Tax (Amendment) Act, 2018 (Act 973).
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He explained that the VAT Act 970 has amended the rate of tax (15%) in Section 3 of the VAT Act, 2013 (Act 870) to 12.5%, and the 12.5 is calculated on the value of the taxable supply of the goods and services or the value of the import of taxable goods and services.
â€œThis means that effectively, the rate for the VAT is 12.5 for the VAT Standard Rate Scheme. However, in accordance with the VAT (Amendment) Act 954 2017, entities that were recently appointed as VAT withholding agents by the Commissioner-General will continue to account for withholding VAT, NHIL and GETFL at 7% of the taxable value to GRA,â€ he explained.
The National Health Insurance (Amendment) Act, 2018 (Act 971)
He explained that the National Health Insurance (Amendment) Act, 2018 (Act 971) has delinked the levy from VAT, and Act 971 has amended section 47 of National Health Insurance Act, 2012 (Act 852) by converting the NHIL into a levy which is not subject to the input-output method of computation.
The Ghana Educational Trust Fund (Amendment) Act, 2018 (Act 972)
The Commissioner-General explained that this Act has converted the VAT component allocated to the Ghana Educational Trust into a levy which is not subject to the input-output method of computation.
He added that the levy which the Act imposes is on the supply of goods and services in the country other than exempt goods or services and import of goods and services other than exempt goods.
Computation of the NHIL, GETFL and VAT
According to him, the two-and-half per cent NHIL and the other two-and-half per cent GETFL shall be computed on the value of taxable supply, which includes total cost incurred, except deductible VAT, and the 12.5% shall be computed on the NHIL and GETFL charged inclusive value of the taxable supply.
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The Income Tax (Amendment) Act, 2018 (Act 973)
The amendment has introduced an additional tax band exceeding GHÂ¢10,000 per month or exceeding at a rate of 35%.
He said the implication of this amendment is that salaried workers or employees whose chargeable income exceeds GHÂ¢10,000 per month or GHÂ¢120,000 per annum would be taxed at 35%.
He emphasised that it is not the whole salary which would attract the 35% as speculated, but the excess.