The consumers are complaining about price hikes attributed to VAT but the GRA has made it clear that VAT is not designed to increase prices. Some readers have said that what they have gathered from the Public media is that only those who have businesses with turnover of one Million dalasi are obliged to register to collect value added tax and those who have a turnover of 500,000 dalasi could do so voluntarily.
Foroyaa sees the need to review the tax laws piecemeal so that the readers would have a clear understanding of tax obligations and exemptions. We hope the GRA will follow our coverage with keenness and step in to clarify any point deemed necessary.
The state attempted to simplify the taxation system by enacting the Income Tax and Value Added Tax Act 2012. The Act establishes five different forms of taxation, namely, Income Tax, Capital Gains Tax, Residential Rent Tax, Fringe Benefits Tax and Value Added Tax.
Income tax is imposed each year for a person who has chargeable income for a year. Any person who earns 7501 dalasi per annum or more is obliged to pay income tax unless one is exempted.
Chargeable income is any profit or gain derived from business activity, employment income, property income other than rent or any other income derived by a person during the year that is not exempted from income tax. This is added to give a total income from which all deductions allowed for tax purposes are subtracted to give the gross income of the person which is the taxable income.
There is income tax for individuals, trusts, partnerships and companies.
All tax payers shall acquire an income tax return which is a prescribed form to be filled and returned to the Commissioner General before 31st March of each financial year for review and validation of what one's chargeable income is.
We will interview the tax authorities to indicate to our readers how much tax to pay if you earn between 7501 dalasi which is less than one dollar a day and 17, 500, between 17, 501 and 27, 500; between 27, 501 and 37, 500, between 37, 501 and 47, 500 and finally any sum above 47, 500. This will enable the readers to compute their own tax obligations before being assessed and save the money so as not to default in tax payment. We hope former employees of the Tax establishment would also establish offices to help tax payers to process their returns with speed and accuracy for a fee.
Foroyaa will give free advertisement for the pioneers of such an enterprise. Follow the analysis in subsequent issues.