Although government appears silent on new taxes in its 2016 budget, Ghanaians should expect to pay more taxes in the coming year, PricewaterhouseCoopers has observed.
This is part of the revised Income Tax Act which takes effect from next year.
Even though the Finance Minister referred to the revised tax laws in the Act during his presentation in Parliament last Friday in Parliament, he fell short of such details.
Revealing some more specifics on Joy Fm, Senior Manager of Tax Services at Price Water house Coopers, Abeiku Gyan Quansah explained that the incomes of Ghanaians or non-Ghanaians will be taxed when he stays in the country beyond three months
“Now for residence persons, if you earn income your worldwide income will be taxed. Let’s say I’m a resident in Ghana, staying in the USA and I came home on holidays and sent some money into my bank account.
“Under the old law if I’m resident in Ghana, the only amount that will be taxed is the one I sent home”.
“Now we are moving to a regime whereby whether or not you send the money home, as long as you are a Ghanaian resident your money will be subjected to tax in Ghana”.
“This was not mentioned in the budget”.
He said government is now collaborating with departments of other countries to facilitate the taxing of incomes of persons who keep their earnings in foreign countries and bring a part to Ghana to be taxed while resident.
For businesses, he cites mainly an increase in Capital Gains Tax and Withholding Taxes. According to him, the Capital Gains tax has gone up from 15% to 25%.
The tax is gains that you make when you dispose off any asset that gives rise to capital gain
“For instance, you sell a building or a piece of land you’ll be subjected to 15% tax but now that has been removed and you will be subject to tax at the general rate.
“In Ghana the general rate is 25% which simply means that the Capital Gains Tax has increased from 15% to 25%” he said.
He also explained that Withholding Tax on services has increased from 5% to 15%.
“For example, previously if PWC wanted JOY FM to do something for it, it is expected that when paying, PWC will withhold 5% of that to be sent to government and we will give evidence of that but now the amount has been revised to 15%”.
The Tax expert also pointed out some tax reliefs for businesses in 2016.
They could also enjoy some respite as per the revised Income Tax Act.
Abeiku Gyan Quansah explained that from 2016, businesses who suffered losses in the previous year may be compensated in their tax returns.
So, for instance Joy FM makes a loss of GHC 20 this year, under the new law, they can carry forward that loss so that next year if they make an income of GHC100, they pay taxes on GHC100 minus GHC20 and apply the right amount of taxes”
Mr. Quansah added that the revision of the country’s tax laws which has resulted in these developments is only in line with international best practice.
“Worldwide, a lot of regimes allow businesses to carry forward tax losses, the reason is that government is a silent shareholder in businesses because the taxes paid are used to construct roads, hospitals, pay doctors etc”.
“So if I make losses it is also expected that the state bears my losses by allowing me to carry forward those losses” he added.
Source: myjoyonline