A tax analyst, Abdallah Ali Nakyea, says businesses that want to benefit from government’s available tax incentives should ensure they comply with all the necessary requirements by law.
The Ghana Revenue Authority has reviewed the due dates for the filing of tax returns and payments of same to cushion businesses from the impact of the coronavirus.
The government has also announced some tax reliefs for businesses that contribute to the COVID-19 Relief Fund.
But speaking on the on-air series of the Citi Business Festival, Dr Ali Nakyea said it is imperative for prospective beneficiaries to fulfill their side of the bargain so they are relieved of the tax burden in times like these.
He spoke on the topic, “Compliance In Abnormal Times”.
Amend the law
“At the beginning of the year, you would have served the Ghana Revenue Authority your self-assessment. This has been impacted on and the law allows you to apply to the GRA to revise the self-assessment.
“Even if you will have to go and sit with them, there should be a written document. So, you apply to the Ghana Revenue Authority stating the grounds on which you have been constrained and why you are revising your self-assessment because you can’t meet deadlines, you will need to marshal your arguments in your applications,” he said.
In the wake of the outbreak of the novel coronavirus in the country, the Ghana Revenue Authority introduced some tax reliefs to assist taxpayers on things such as payment guidelines to compliance actions.
Among other measures, they stated that taxpayers who redeem all their outstanding debts due the Authority by 30 June 2020, will be granted a remission of penalties on their principal debts.
Dr Ali Nakyea is however calling on government to amend the laws to include a relief of late payment for some category of defaulters, since there are different laws pertaining to tax defaulting.
“So, if you are unable to meet the deadline, the best way of compliance is to apply to the GRA for extension of time to file. The difficulty here is that an extension can be granted, but the law says it does not extend for you the time of payment.
“And this is one area government can look at to ease the pressure off businesses. The extension of time should include a relief for late payment because in the law there is a different penalty for late filing of your returns and a different penalty for late payment of tax. So you can get an extension of the date to file your returns but that does not absolve you of the actual payment,” he said.
He added, “The argument for non-payment could be the impact on your business or your finances as well. Then the late filing could be other reasons because people are working from home as people do not work from the office full-time.”
The Minister for Finance, Ken Ofori-Atta, has already said that the country is recording a huge decline in revenue from the port, petroleum revenue receipts, as well as tax revenues, due to the economic slowdown caused by the COVID-19 pandemic.
The government is targeting total revenue and grants for 2020 to reach GHC67 billion, but the situation will lead to an increase in Ghana’s fiscal deficit.
Also, the COVID-19 fight could cost Ghana about GHC9.5 billion, leading to an ultimate fiscal gap of GHC11.4 billion.
GRA should put measures in place to tax digital economy
Dr Abdallah Ali Nakyea earlier proposed to the Ghana Revenue Authority (GRA) to put in place some essential measures to tax digital business transactions as most businesses have resort to digital platforms to continue with the provision of services and sustain their operations.
He says this should enable the Authority to increase its revenue sources in order to meet or exceed revenue targets.