Ghana Revenue Authority Structure
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Questions and Answers

What is the minimum amount of a contract between a payee and a resident person that triggers the threshold for withholding tax?

  • GHS 5,000
  • GHS 2,000 (correct)
  • GHS 1,000
  • GHS 10,000

    • Which of the following is exempt from withholding tax on goods, works or services?

  • Payment under a contract for the sale of goods to a foreign company
  • Payment to a resident insurance company (correct)
  • Payment under a contract for the sale of goods which constitute trading stock of both the vendor and the purchaser (correct)
  • Payment to a non-resident insurance company

    • Who can exempt a person from deducting tax in respect of an institution or a specific contract?

  • The Auditor-General
  • The Minister of Finance
  • The Commissioner-General (correct)
  • The Director of Taxes

    • What is the percentage of voting power required for a resident company to be exempt from withholding tax on dividends?

    <p>25%</p> Signup and view all the answers

    How often must a person who is granted an exemption on trading stocks submit a list of particulars of payments?

    <p>Quarterly</p> Signup and view all the answers

    What happens when two or more contracts in respect of the same goods, works or services are entered into?

    <p>They are treated as a single contract</p> Signup and view all the answers

    Who is responsible for paying withholding tax on dividends?

    <p>The resident company paying the dividend</p> Signup and view all the answers

    What is the purpose of submitting a list of particulars of payments by a person exempt from withholding tax on trading stocks?

    <p>To comply with the law</p> Signup and view all the answers

    What is the withholding tax rate on dividends paid to a resident person in Ghana?

    <p>8%</p> Signup and view all the answers

    What is the withholding tax rate on rent paid to a non-resident landlord for a non-residential property?

    <p>15%</p> Signup and view all the answers

    What is the withholding tax rate on fees or allowances paid to a resident director of a company?

    <p>20%</p> Signup and view all the answers

    What is the withholding tax rate on insurance premiums paid to a non-resident insurer?

    <p>5%</p> Signup and view all the answers

    What is the withholding tax rate on supply of goods exceeding GH₵ 2,000 per annum?

    <p>3%</p> Signup and view all the answers

    What is the withholding tax rate on payment to a petroleum subcontractor?

    <p>7.5%</p> Signup and view all the answers

    What is the withholding tax rate on income of a non-resident individual from employment?

    <p>25%</p> Signup and view all the answers

    What is the purpose of withholding tax by an employer under S.114?

    <p>To tax the employee</p> Signup and view all the answers

    Who heads the Ghana Revenue Authority?

    <p>Commissioner-General</p> Signup and view all the answers

    What is the main function of the Domestic Tax Revenue Division?

    <p>Collecting domestic direct and indirect taxes</p> Signup and view all the answers

    What is the purpose of the Support Services Division?

    <p>Providing support services to the Authority</p> Signup and view all the answers

    What is the function of the Customs Division?

    <p>Collecting taxes at the ports and borders</p> Signup and view all the answers

    What is the core function of the Domestic Tax Revenue Division?

    <p>All of the above</p> Signup and view all the answers

    What is the responsibility of the Customs Division in terms of patrolling?

    <p>Patrolling the country's borders and other strategic locations</p> Signup and view all the answers

    What is the Customs Division's agency function?

    <p>Performing agency duties on behalf of Ministries, Departments and Agencies</p> Signup and view all the answers

    What is the ultimate destination of the amounts collected by the Domestic Tax Revenue Division?

    <p>The Consolidated Fund</p> Signup and view all the answers

    Which of the following is exempt from tax under Act 896?

    <p>The salary, allowances, facilities, pension and gratuity of the President</p> Signup and view all the answers

    What is the condition for a public corporation to be exempt from tax under Act 896?

    <p>The public corporation is not set up as a commercial venture and the income is from an activity that is directly connected with the status of that public corporation</p> Signup and view all the answers

    What is exempt from tax under Act 896 in relation to a person receiving instruction at an educational institution?

    <p>The income from a scholarship, exhibition, or bursary</p> Signup and view all the answers

    What is exempt from tax under Act 896 in relation to a non-resident person?

    <p>The income from a business of operating ships or aircrafts</p> Signup and view all the answers

    What is exempt from tax under Act 896 in relation to a state-owned or state-sponsored educational institution?

    <p>The income from the institution</p> Signup and view all the answers

    What is exempt from tax under Act 896 in relation to interest paid to an individual?

    <p>Interest paid by a resident financial institution</p> Signup and view all the answers

    What is the minimum chargeable income that a person may be required to compute and pay tax on under Act 896?

    <p>5% of turnover</p> Signup and view all the answers

    What is exempt from tax under Act 896 in relation to a non-resident person and bonds issued by the Government of Ghana?

    <p>The gains from the realisation of the bonds</p> Signup and view all the answers

    When calculating income from a business, what should be excluded?

    <p>An amount specified in respect of an exemption under section 7</p> Signup and view all the answers

    Which of the following is included in the calculation of income from an investment?

    <p>A gain from the realisation of an investment asset</p> Signup and view all the answers

    What is excluded from the calculation of income from an investment?

    <p>An amount specified in respect of an exemption under section 7</p> Signup and view all the answers

    Which of the following is not included in the calculation of income from an investment?

    <p>An amount that is included in calculating the income of the person from an employment</p> Signup and view all the answers

    What is the basis for calculating income from an investment?

    <p>Gains and profits from conducting the investment</p> Signup and view all the answers

    Which of the following is included in the calculation of income from a business?

    <p>An amount derived from a business asset</p> Signup and view all the answers

    What is the basis for calculating income from a business?

    <p>Gains and profits from conducting the business</p> Signup and view all the answers

    Which of the following is not excluded from the calculation of income from a business?

    <p>An amount that is included in calculating the income of the person from a business</p> Signup and view all the answers

    A company is considered a resident company in Ghana if it is incorporated under the Companies Act, 2019 (Act 992) or has its management and control exercised in Ghana at any time during the year of assessment.

    <p>True</p> Signup and view all the answers

    A non-resident person's assessable income includes income from employment, business, or investment with a source outside Ghana.

    <p>False</p> Signup and view all the answers

    A resident person's assessable income includes income from employment, business, or investment that has ceased.

    <p>True</p> Signup and view all the answers

    A non-resident person with a Ghanaian permanent establishment is taxed on income connected with the permanent establishment, regardless of the source of the income.

    <p>True</p> Signup and view all the answers

    Income from an employment, business, or investment has a source in Ghana if it accrues in or is derived from outside Ghana.

    <p>False</p> Signup and view all the answers

    A non-resident person's assessable income includes only income from employment, business, or investment with a source in Ghana.

    <p>True</p> Signup and view all the answers

    A resident person's assessable income includes only income from employment, business, or investment with a source in Ghana.

    <p>False</p> Signup and view all the answers

    A company incorporated under the Companies Act, 2019 (Act 992) is automatically considered a non-resident company.

    <p>False</p> Signup and view all the answers

    The Commissioner-General is responsible for the collection of taxes at the ports, borders, and entry points.

    <p>False</p> Signup and view all the answers

    The Domestic Tax Revenue Division is responsible for identifying all taxpayers and assessing them for tax and levies.

    <p>True</p> Signup and view all the answers

    A withholding agent who fails to withhold tax in accordance with the Income Tax Act shall pay a penalty to the Commissioner-General.

    <p>False</p> Signup and view all the answers

    The Support Services Division is responsible for the collection of domestic direct and indirect taxes.

    <p>False</p> Signup and view all the answers

    A withholding agent who pays the tax that should have been withheld to the Commissioner-General is entitled to recover an equal amount from the withholdee.

    <p>True</p> Signup and view all the answers

    The Customs Division performs a preventive function by patrolling the country's borders and other strategic locations.

    <p>True</p> Signup and view all the answers

    The Ghana Revenue Authority is headed by three Commissioners.

    <p>False</p> Signup and view all the answers

    A provision in an agreement that prohibits the deduction or withholding of a tax required to be deducted or withheld under the Income Tax Act is valid.

    <p>False</p> Signup and view all the answers

    A withholding certificate shall cover a calendar year and shall be served on the withholdee within 60 days after the end of the year.

    <p>False</p> Signup and view all the answers

    The amounts collected by the Domestic Tax Revenue Division are paid into the treasury.

    <p>False</p> Signup and view all the answers

    A withholding agent is required to prepare and serve on a withholdee a withholding certificate.

    <p>True</p> Signup and view all the answers

    The Customs Division performs agency duties on behalf of private companies.

    <p>False</p> Signup and view all the answers

    The Commissioner-General is responsible for the day-to-day operations of the Domestic Tax Revenue Division.

    <p>False</p> Signup and view all the answers

    A withholding certificate shall specify the amount of tax paid by the withholdee.

    <p>False</p> Signup and view all the answers

    An employer is exempt from issuing a withholding certificate.

    <p>False</p> Signup and view all the answers

    A withholding agent who withholds tax under the Income Tax Act and pays the tax to the Commissioner-General is treated as having paid the amount withheld to the withholdee.

    <p>True</p> Signup and view all the answers

    A person, other than a company, can account for income tax purposes only on a cash basis.

    <p>False</p> Signup and view all the answers

    The Commissioner-General may require a person to use a particular method of accounting if satisfied that it reflects the income of that person.

    <p>True</p> Signup and view all the answers

    An adjustment is not made when the method of accounting of a person changes.

    <p>False</p> Signup and view all the answers

    The Commissioner-General may approve an application by a person to change the method of accounting of that person.

    <p>True</p> Signup and view all the answers

    A person can change their method of accounting without the Commissioner-General's approval.

    <p>False</p> Signup and view all the answers

    The method of accounting of a person can only be changed once.

    <p>False</p> Signup and view all the answers

    The Commissioner-General's approval is required for all changes to a person's method of accounting.

    <p>True</p> Signup and view all the answers

    A person's method of accounting can only be changed in the basis period following the change.

    <p>False</p> Signup and view all the answers

    A person ascertaining the profits and gains from a business for a year of assessment should include an amount specified in respect of an exemption under section 7.

    <p>False</p> Signup and view all the answers

    Income from an investment includes a gain from the realisation of an investment asset as calculated under Part IV of the Income Tax Act.

    <p>True</p> Signup and view all the answers

    A person ascertaining the profits and gains from an investment for a year of assessment should exclude an amount derived as consideration for accepting a restriction on the capacity of the individual to conduct the investment.

    <p>False</p> Signup and view all the answers

    Winnings from lottery are excluded from the calculation of income from an investment.

    <p>False</p> Signup and view all the answers

    An amount that is included in calculating the income of the person from an employment is excluded from the calculation of income from a business.

    <p>True</p> Signup and view all the answers

    Dividends are excluded from the calculation of income from an investment.

    <p>False</p> Signup and view all the answers

    A person ascertaining the profits and gains from an investment for a year of assessment should exclude an amount specified in respect of a final withholding payment.

    <p>True</p> Signup and view all the answers

    Rent is excluded from the calculation of income from an investment.

    <p>False</p> Signup and view all the answers

    Study Notes

    Structure of the Ghana Revenue Authority

    • The Ghana Revenue Authority (GRA) is headed by the Commissioner-General, with support from three Commissioners in charge of:
      • Domestic Tax Revenue Division (DTRD)
      • Customs Division (CD)
      • Support Services Division (SSD)

    Domestic Tax Revenue Division (DTRD)

    • Responsible for the collection of both domestic direct and indirect taxes
    • Core functions include:
      • Identifying all taxpayers
      • Assessing taxpayers for tax and levies
      • Collecting taxes and levies
      • Paying all amounts collected into the Consolidated Fund

    Customs Division (CD)

    • Responsible for the collection of taxes at the ports, borders, and entry points
    • Performs a preventive function by patrolling the country's borders and other strategic locations
    • Performs agency duties on behalf of Ministries, Departments, and Agencies

    Withholding Tax (WHT) Rates

    • Resident Persons:
      • Dividends: 8%
      • Interest (excluding individuals and resident financial institutions): 8%
      • Rent on properties:
        • Residential: 8%
        • Non-Residential: 15%
      • Natural resource payments and royalties: 15%
      • Fees or allowances, to a resident director, manager, trustee, or board member: 20%
      • Fees for examiners, invigilators, supervisors of examination, or part-time teaching or lecturing: 10%
      • Endorsement fee: 10%
      • Winnings from Lottery: 10%
      • Realisation of asset or liability: 3%
      • Commission to a resident lotto receiver or agent: 10%
      • Commission to a sales agent: 10%
      • Commission to a resident insurance sales or canvassing agent: 10%
      • Insurance premium with a source in Ghana to a non-resident person: 5%
      • Supply or use of goods exceeding GH₵ 2,000 per annum: 3%
      • Supply of any works exceeding GH₵ 2,000 per annum: 5%
      • Supply of services by an entity exceeding GH₵ 2,000 per annum: 7.5%
      • Payment for unprocessed precious minerals: 1.5%
      • Payment to petroleum subcontractor: 7.5%

    Withholding Tax (WHT) Rates - Non-Resident Persons

    • Income of non-resident individual from employment: 25%
    • Management, consulting, and technical service fee: 20%
    • Dividend: 8%
    • Royalties, natural resources payments, and rents: 15%
    • Endorsement Fees: 20%
    • Repatriated Branch after-tax profits: 8%
    • Interest Income: 8%
    • Realisation of asset or liability: 10%
    • General insurance premium: 5%
    • Petroleum sub-contractor: 15%
    • Supply of goods, or works, or the supply of any services where the contract gives rise to income from Ghana: 20%
    • Payments received by a person who conducts a relevant transport business: 15%
    • Payments received by a person who conducts a business of transmitting or receiving messages by cable, radio, optical fibre, or satellite or electronic communication: 15%

    Withholding by Employer - S.114 (PAYE)

    • An employer shall withhold tax from the payment of an amount to be included in ascertaining the income of an employee from the employment
    • Threshold: the amount of the contract exceeds GHS 2,000
    • Two or more contracts in respect of the same goods, works, or services shall be treated as a single contract

    Exemptions

    • Withholding from Supply of Goods, Service Fees, and Contract Payments (Exemptions) - S.116
      • Exemption does not apply to a premium paid to a resident insurance company
      • Exemption does not apply to payments under a contract for the sale of goods which constitute trading stock of both the vendor and the purchaser
      • Exemption may be granted in writing by the Commissioner-General for a good cause shown
      • Exemption may be granted in writing by the Commissioner-General if a person has a satisfactory tax record
    • Taxation of Shareholders - S.71
      • Exemption: a dividend paid to a resident company by another resident company is exempt from tax where the company that received the dividend controls indirectly or directly, at least 25% of the voting power of the company which paid the dividend

    Exempt Amounts

    • Salary, allowances, facilities, pension, and gratuity of the President
    • Income of the Government of Ghana or a local authority
    • Income of a public corporation
    • Pension
    • Capital sum paid to a person as compensation or a gratuity in relation to a personal injury or the death of another person
    • Income of a non-resident person from a business of operating ships or aircrafts
    • Income from cocoa of a cocoa farmer
    • Income of a person receiving instruction at an educational institution from a scholarship, exhibition, bursary, or similar educational endowment
    • Income of an individual entitled to privileges to the extent provided for by the Diplomatic Immunities Act, 1962 (Act 148) or a similar enactment
    • Income of an individual to the extent provided for in an agreement between the Government of Ghana and a foreign government or a public international organisation
    • Cost of living allowance, other than training allowance paid in place of salary for services rendered abroad
    • Income from a temporary employment of an individual with the Government of Ghana
    • Income of an individual from employment in the public service of the government of a foreign country
    • Income of a state-owned or state-sponsored educational institution
    • Income of an institution or trust of a public character established by an enactment solely for the purpose of scientific research
    • Interest paid to an individual by a resident financial institution or on bonds issued by the Government of Ghana
    • Interest or dividend paid or credited to a holder or member on an investment in an approved unit trust scheme or mutual fund
    • Interest paid to a non-resident person on bonds issued by the Government of Ghana
    • Gains from the realisation of bonds issued by the Government of Ghana by a non-resident person
    • Gains from the realisation of securities traded on the Ghana Stock Exchange up to December 31st, 2021
    • Income of an approved unit trust scheme or mutual fund
    • Income of an approved Real Estate Investment Trust (REIT)

    Minimum Chargeable Income - S.2A

    • A person may be required to compute and pay tax on a minimum chargeable income of 5% of turnover where the person has been declaring losses for the previous 5 years of assessment

    Income from Business

    • Exclusions: income specified in respect of an exemption under section 7, a final withholding payment, and an amount included in calculating the income of the person from an employment

    Income from Investment

    • Inclusions: dividends, interest, annuity, natural resource payment, rent, and royalty, gain from the realisation of an investment asset, an amount derived as consideration for accepting a restriction on the capacity of the individual to conduct the investment, a gift received by a person other than a gift received in respect of business or employment, and any other amount required to be included under section 59, Part III, or Part VI
    • Exclusions: income specified in respect of an exemption under section 7, a final withholding payment, and an amount included in calculating the income of the person from an employment or business

    Structure of the Ghana Revenue Authority

    • The Ghana Revenue Authority (GRA) is headed by the Commissioner-General, with support from three Commissioners in charge of the following divisions:
      • Domestic Tax Revenue Division (DTRD)
      • Customs Division (CD)
      • Support Services Division (SSD)

    Domestic Tax Revenue Division (DTRD)

    • Responsible for the collection of both domestic direct and indirect taxes
    • Core functions include:
      • Identifying all taxpayers
      • Assessing taxpayers for tax and levies
      • Collecting taxes and levies
      • Paying all amounts collected into the Consolidated Fund

    Customs Division (CD)

    • Responsible for the collection of taxes at the ports, borders, and entry points
    • Performs a preventive function by patrolling the country's borders and other strategic locations
    • Performs agency duties on behalf of Ministries, Departments, and Agencies

    Concept of Tax Residence

    • A company is resident in Ghana for a year of assessment if:
      • Incorporated under the Companies Act, 2019 (Act 992)
      • Management and control of the company's affairs are exercised in Ghana at any time during that year
    • Any other person is a non-resident person

    Assessable Income

    • The assessable income of a person for each year of assessment is the income from any employment, business, or investment (EBI)
    • Assessable income for a resident person includes:
      • Income from each employment, business, or investment for the year
      • Income from any employment, business, or investment for the year, whether or not the source from which the income is derived has ceased
    • Assessable income for a non-resident person includes:
      • Income from the employment, business, or investment for the year, to the extent that the income has a source in Ghana
      • Income connected with a Ghanaian permanent establishment, irrespective of the source of the income

    Method of Accounting

    • A person may account for income tax purposes on either a cash or accrual basis, whichever most clearly reflects the income of that person
    • The Commissioner-General may require a person to use a particular method of accounting or approve an application to change the method of accounting

    Tax Compliance

    • A withholding agent who fails to withhold tax shall pay the tax that should have been withheld
    • A withholding agent who pays the tax that should have been withheld is entitled to recover an equal amount from the withholdee
    • A provision in an agreement that prohibits the deduction or withholding of a tax is void
    • A withholding agent shall prepare and serve a withholding certificate on the withholdee, specifying the amount of payments made and the tax withheld
    • A withholding certificate shall cover a calendar month and shall be served on the withholdee within 30 days after the end of the month

    Basic Definitions and Concepts

    • The income of a person from an employment includes:
      • Income from an employment, business, or investment
      • Exclusions, such as exempt amounts and final withholding payments
    • The income of a person from an investment includes:
      • Gains and profits from conducting the investment
      • Inclusions, such as dividends, interest, annuity, natural resource payments, rent, and royalty
      • Exclusions, such as exempt amounts and final withholding payments

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    This quiz covers the structure and organization of the Ghana Revenue Authority, including its divisions and leadership roles.

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