Commissioner General, GRA
The Ghana Revenue Authority (GRA) is expected to enforce the tax laws in the country due to the likelihood of government broadening the tax base and focusing more on compliance.
Abeku Gyan-Quansah, Manager, Tax Services at PricewaterhouseCoopers (PwC), made this known at a business breakfast meeting organized by the Chamber of Commerce and Industry France Ghana (CCIFG).
He said, “The government may be looking to reduce certain taxes and eliminate others. To match this potential revenue loss, the government is likely to broaden the tax base and focus more on tax compliance.”
According to him, the penalty regime in Ghana, as a result of the introduction of the Revenue Administration Act, is more punitive, and incorrect returns may potentially lead to penalties of up to 100% of the tax shortfall.
He therefore called on businesses to ensure compliance with tax laws, including filing of annual corporate income tax, transfer pricing and annual employers’ deduction returns on time.
Caution To Businesses
Mr. Gyan-Quansah cautioned business executives to take note of the expanded definition of Value Added Taxes on entertainment expenses, income tax impact on concessionary loans given to employees and the reduction of time for making income tax refund applications from six years to three years.
He mentioned that although it would be beneficial for entities to be financed by debt, care should be given to the new thin capitalization rules and the special treatment for the deductibility of financial cost.
He said companies should deal with related parties to have contemporaneous transfer pricing documentation to defend their inter-company pricing arrangements.
Business Breakfast Meeting
The Business Breakfast meeting was organized by the Chamber of Commerce and Industry France Ghana (CCIFG) with PwC on the Tax System in Ghana.
The well-attended event offered participants the opportunity to get the much needed insight into some of the tax implications on shareholders, employees, suppliers and customers.
Mistakes often made by businesses, which ultimately increase their costs and/or negatively impact their reputation were highlighted.
The event was also used to discuss some of the potential implications of reduction, increase and removal of some existing taxes in line with the current government’s 2016 manifesto.
By Cephas Larbi