TAX AMNESTY BILL, 2017 MEMORANDUM The ... AWS
TAX AMNESTY BILL, 2017
MEMORANDUM The object of the Bill is to grant amnesty to persons who failed to register with the Commissioner-General or file their returns or pay taxes as required by enactments administered by the Commissioner-General. Government policy is to reduce taxes on production in order to lower the cost of production and through that increase financial liquidity for the productive sectors of the economy and thus accelerate growth of the private sector and its capacity to generate jobs. Ghana Revenue Authority records show that registered taxpayers number less than one million five hundred thousand with employees numbering one million three hundred and sixty-four thousand and self-employed individuals numbering forty-four thousand five hundred and twenty-nine although the economically active population is estimated at more than six million. The Ghana National Employment Report issued in 2016 by the Ghana Statistical Service further indicates that employees alone total around three million which is higher than the total number of individual taxpayers on the Ghana Revenue Authority Tax Register. Data provided by the Registrar-General's Department indicate that they have registered three hundred and forty-six thousand companies while the Ghana Revenue Authority Register has approximately thirty-two thousand active companies. A significant number of taxpayers fail to file returns with average filing rates falling below fifty percent. It will require hundreds of man hours to follow-up these defaulting taxpayers and to register the unrecorded ones. Penalties for non-filing are quite stringent at GH¢500 for late submission; in addition, there is a charge of GH¢10 for each additional day in default. This implies that for a person who failed to file the 2016 return by April 30, 2017 that person would have accrued penalties of Gld¢ 2,950 by December 31, 2017. This excludes interests computed as one hundred and twenty-five percent of the statutory rate compounded monthly and added to the amount outstanding at the start of the period; and a fine of up to GH012,000 or imprisonment of up to one year or both. These accumulated amounts and sanctions sometimes deter taxpayers from coming forward voluntarily to file returns and make outstanding payments.
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Government is therefore introducing an amnesty to exempt taxpayers who register and the returns within a targeted period from paying penalties and interests for late or non-submission of returns and late payments. This includes exemption from prosecution. Ghana Revenue Authority will, after the amnesty period, wage an intense campaign to prosecute continuing defaulters and offenders. The specific objectives of this amnesty are to broaden the tax base; update the Ghana Revenue Authority taxpayer database; increase and improve the tax compliance culture; and obtain data for research and planning purposes.
Clause 1 of the Bill deals with amnesty for taxes, penalties and interests and prohibits the Commissioner-General from assessing or recovering taxes, penalties and interest in respect of previous years up to and including the 2017 year of assessment from a person, where, that person on or before the 30th of September, 2018, registers with the Ghana Revenue Authority and files income tax returns for the 2014, 2015 and 2016 years of assessment. Clause 2 deals with amnesty for penalties and interests and prohibits the Commissioner-General from assessing or recovering penalties and interest in respect of previous years up to and including the 2017 year of assessment from a person, where, that person submits returns, or amended returns, containing a full disclosure of all previously undisclosed liabilities up to the 2017 year of assessment on or before the 30th of September, 2018 and pays all assessed and outstanding taxes. The scope of the tax amnesty is provided for in clause 3. The tax amnesty is to apply to persons who have not previously registered with the Ghana Revenue Authority or who, having been registered previously, have not submitted returns or are in arrears for the submission of returns. The clause also provides for non-application of the tax amnesty.
Clause 4 deals with application for tax amnesty and specifies the time frame, requirements and procedure for applying for tax amnesty. Clause 5 provides for complaints and determination of complaints. An applicant who is dissatisfied with a decision of the Commissioner-General to grant that applicant tax amnesty may, within thirty days after receipt of the decision, lodge a written complaint with the Commissioner-General for determination. The CommissionerGeneral is required to make a determination within thirty days after receipt of the complaint and notify the taxpayer accordingly. Terms of payment are dealt with in clause 6. The Commissioner-General may grant terms for the payment of assessed amounts and outstanding arrears. 2
Clause 7 deals with the remission of tax. The provisions of this Bill are not to derogate from the powers of the Commissioner-General to remit tax under an Act administered by the Commissioner-General. Administrative guidelines are provided for in clause 8. The CommissionerGeneral may issue administrative guidelines as may be required for the purposes of this Bill.
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c
KEN OrORI-ATTA Minister responsible for Finance
Date: (J-J
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TAX AMNESTY BILL, 2017
ARRANGEMENT OF SECTIONS
Section 1.
Amnesty for taxes, penalties and interests
2.
Amnesty for penalties and interests
3.
Scope of amnesty
4.
Application for tax amnesty
5.
Complaints and determination of complaints
6.
Terms of payment
7.
Remission of tax
8.
Administrative guidelines
TAX AMNESTY BILL, 2017 A BILL ENTITLED TAX AMNESTY ACT, 2017 AN ACT to grant amnesty to persons who have failed to register with the CommissionerGeneral or file their tax returns or pay taxes as required by enactments administered by the Commissioner-General and to provide for related matters. PASSED by Parliament and assented to by the President: Amnesty for taxes, penalties and interests 1. The Commissioner-General shall not asses or recover taxes, penalties and interest in respect of previous years up to and including the 2017 year of assessment from a person, where, that person on or before the 30th of September 2018, registers with the Ghana Revenue Authority and files income tax returns for the 2014, 2015 and 2016 years of assessment.
Amnesty for penalties and interests 2. The Commissioner-General shall not assess or recover penalties and interest in respect of previous years up to and including the 2017 year of assessment from a person, where, that person (a)
submits returns or amended returns, containing a full disclosure of all previously undisclosed liabilities up to the 2017 year of assessment on or before the 30th of September, 2018; and
(b)
pays all assessed and outstanding taxes.
Scope of amnesty The tax amnesty shall apply to persons who have not previously 3. (1) registered with the Ghana Revenue Authority or who, having been registered previously, have not submitted returns or are in arrears for the submission of returns. 5
The tax amnesty shall not apply in respect of a tax if the person who (2) should have paid the tax (a)
has been assessed in respect of the tax or any matter relating to the tax;
(b)
is under audit or investigation in respect of the undisclosed income or any matter relating to the undisclosed income unless that person makes a full disclosure and declares and pays the accrued liabilities before the conclusion of the audit or investigation; or
(c)
has been notified by the Commissioner-General or by a person acting for or on behalf of the Commissioner-General of an enforcement action relating to the failure to comply with an enactment administered by the Commissioner-General unless that person submits the returns or makes immediate payments of any taxes assessed or due.
The amnesty shall not apply where the person fails to comply with the (3) provisions of an enactment administered by the Commissioner-General relating to the furnishing of a return or payment due from the 1st of January, 2018. (4) The Amnesty does not apply to payments and returns due from the 1st of January, 2018 under an enactment administered by the Commissioner-General.
Application for tax amnesty 4. (1) A person who qualifies for tax amnesty shall submit a written application and the returns required under section 1 to the Commissioner-General
(2)
(a)
during the period commencing from 1st January, 2018 and ending on 31st August 2018;
(b)
at the address specified by the Commissioner-General; and
(c)
in the form and manner determined by the Commissioner-General,
The Commissioner-General shall (a)
within thirty days after receipt of an application, serve notice on a person who has applied for tax amnesty of the decision of the Commissioner-General to grant or refuse the application; and 6
(b)
where there is a refusal, specify the reasons for the decision to refuse the application for tax amnesty.
Complaints and determination of complaints An applicant who is dissatisfied with a decision of the Commissioner5. (1) General to grant that applicant tax amnesty may, within thirty days after receipt of the decision, lodge a written complaint with the Commissioner-General for determination. The Commissioner-General shall make a determination within thirty days (2) after receipt of the complaint and notify the taxpayer accordingly.
Terms of payment 6. The Commissioner-General may grant terms for the payment of assessed amounts and outstanding arrears.
Remission of tax The provisions of this Act shall not derogate from the powers of the 7. Commissioner-General to remit tax under an Act administered by the CommissionerGeneral.
Administrative guidelines The Commissioner-General may issue administrative guidelines as may be 8. required for the purposes of this Act.
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MEMORANDUM The object of the Bill is to grant amnesty to persons who failed to register with the Commissioner-General or file their returns or pay taxes as required by enactments administered by the Commissioner-General. Government policy is to reduce taxes on production in order to lower the cost of production and through that increase financial liquidity for the productive sectors of the economy and thus accelerate growth of the private sector and its capacity to generate jobs. Ghana Revenue Authority records show that registered taxpayers number less than one million five hundred thousand with employees numbering one million three hundred and sixty-four thousand and self-employed individuals numbering forty-four thousand five hundred and twenty-nine although the economically active population is estimated at more than six million. The Ghana National Employment Report issued in 2016 by the Ghana Statistical Service further indicates that employees alone total around three million which is higher than the total number of individual taxpayers on the Ghana Revenue Authority Tax Register. Data provided by the Registrar-General's Department indicate that they have registered three hundred and forty-six thousand companies while the Ghana Revenue Authority Register has approximately thirty-two thousand active companies. A significant number of taxpayers fail to file returns with average filing rates falling below fifty percent. It will require hundreds of man hours to follow-up these defaulting taxpayers and to register the unrecorded ones. Penalties for non-filing are quite stringent at GH¢500 for late submission; in addition, there is a charge of GH¢10 for each additional day in default. This implies that for a person who failed to file the 2016 return by April 30, 2017 that person would have accrued penalties of Gld¢ 2,950 by December 31, 2017. This excludes interests computed as one hundred and twenty-five percent of the statutory rate compounded monthly and added to the amount outstanding at the start of the period; and a fine of up to GH012,000 or imprisonment of up to one year or both. These accumulated amounts and sanctions sometimes deter taxpayers from coming forward voluntarily to file returns and make outstanding payments.
1
Government is therefore introducing an amnesty to exempt taxpayers who register and the returns within a targeted period from paying penalties and interests for late or non-submission of returns and late payments. This includes exemption from prosecution. Ghana Revenue Authority will, after the amnesty period, wage an intense campaign to prosecute continuing defaulters and offenders. The specific objectives of this amnesty are to broaden the tax base; update the Ghana Revenue Authority taxpayer database; increase and improve the tax compliance culture; and obtain data for research and planning purposes.
Clause 1 of the Bill deals with amnesty for taxes, penalties and interests and prohibits the Commissioner-General from assessing or recovering taxes, penalties and interest in respect of previous years up to and including the 2017 year of assessment from a person, where, that person on or before the 30th of September, 2018, registers with the Ghana Revenue Authority and files income tax returns for the 2014, 2015 and 2016 years of assessment. Clause 2 deals with amnesty for penalties and interests and prohibits the Commissioner-General from assessing or recovering penalties and interest in respect of previous years up to and including the 2017 year of assessment from a person, where, that person submits returns, or amended returns, containing a full disclosure of all previously undisclosed liabilities up to the 2017 year of assessment on or before the 30th of September, 2018 and pays all assessed and outstanding taxes. The scope of the tax amnesty is provided for in clause 3. The tax amnesty is to apply to persons who have not previously registered with the Ghana Revenue Authority or who, having been registered previously, have not submitted returns or are in arrears for the submission of returns. The clause also provides for non-application of the tax amnesty.
Clause 4 deals with application for tax amnesty and specifies the time frame, requirements and procedure for applying for tax amnesty. Clause 5 provides for complaints and determination of complaints. An applicant who is dissatisfied with a decision of the Commissioner-General to grant that applicant tax amnesty may, within thirty days after receipt of the decision, lodge a written complaint with the Commissioner-General for determination. The CommissionerGeneral is required to make a determination within thirty days after receipt of the complaint and notify the taxpayer accordingly. Terms of payment are dealt with in clause 6. The Commissioner-General may grant terms for the payment of assessed amounts and outstanding arrears. 2
Clause 7 deals with the remission of tax. The provisions of this Bill are not to derogate from the powers of the Commissioner-General to remit tax under an Act administered by the Commissioner-General. Administrative guidelines are provided for in clause 8. The CommissionerGeneral may issue administrative guidelines as may be required for the purposes of this Bill.
1f
c
KEN OrORI-ATTA Minister responsible for Finance
Date: (J-J
3
TAX AMNESTY BILL, 2017
ARRANGEMENT OF SECTIONS
Section 1.
Amnesty for taxes, penalties and interests
2.
Amnesty for penalties and interests
3.
Scope of amnesty
4.
Application for tax amnesty
5.
Complaints and determination of complaints
6.
Terms of payment
7.
Remission of tax
8.
Administrative guidelines
TAX AMNESTY BILL, 2017 A BILL ENTITLED TAX AMNESTY ACT, 2017 AN ACT to grant amnesty to persons who have failed to register with the CommissionerGeneral or file their tax returns or pay taxes as required by enactments administered by the Commissioner-General and to provide for related matters. PASSED by Parliament and assented to by the President: Amnesty for taxes, penalties and interests 1. The Commissioner-General shall not asses or recover taxes, penalties and interest in respect of previous years up to and including the 2017 year of assessment from a person, where, that person on or before the 30th of September 2018, registers with the Ghana Revenue Authority and files income tax returns for the 2014, 2015 and 2016 years of assessment.
Amnesty for penalties and interests 2. The Commissioner-General shall not assess or recover penalties and interest in respect of previous years up to and including the 2017 year of assessment from a person, where, that person (a)
submits returns or amended returns, containing a full disclosure of all previously undisclosed liabilities up to the 2017 year of assessment on or before the 30th of September, 2018; and
(b)
pays all assessed and outstanding taxes.
Scope of amnesty The tax amnesty shall apply to persons who have not previously 3. (1) registered with the Ghana Revenue Authority or who, having been registered previously, have not submitted returns or are in arrears for the submission of returns. 5
The tax amnesty shall not apply in respect of a tax if the person who (2) should have paid the tax (a)
has been assessed in respect of the tax or any matter relating to the tax;
(b)
is under audit or investigation in respect of the undisclosed income or any matter relating to the undisclosed income unless that person makes a full disclosure and declares and pays the accrued liabilities before the conclusion of the audit or investigation; or
(c)
has been notified by the Commissioner-General or by a person acting for or on behalf of the Commissioner-General of an enforcement action relating to the failure to comply with an enactment administered by the Commissioner-General unless that person submits the returns or makes immediate payments of any taxes assessed or due.
The amnesty shall not apply where the person fails to comply with the (3) provisions of an enactment administered by the Commissioner-General relating to the furnishing of a return or payment due from the 1st of January, 2018. (4) The Amnesty does not apply to payments and returns due from the 1st of January, 2018 under an enactment administered by the Commissioner-General.
Application for tax amnesty 4. (1) A person who qualifies for tax amnesty shall submit a written application and the returns required under section 1 to the Commissioner-General
(2)
(a)
during the period commencing from 1st January, 2018 and ending on 31st August 2018;
(b)
at the address specified by the Commissioner-General; and
(c)
in the form and manner determined by the Commissioner-General,
The Commissioner-General shall (a)
within thirty days after receipt of an application, serve notice on a person who has applied for tax amnesty of the decision of the Commissioner-General to grant or refuse the application; and 6
(b)
where there is a refusal, specify the reasons for the decision to refuse the application for tax amnesty.
Complaints and determination of complaints An applicant who is dissatisfied with a decision of the Commissioner5. (1) General to grant that applicant tax amnesty may, within thirty days after receipt of the decision, lodge a written complaint with the Commissioner-General for determination. The Commissioner-General shall make a determination within thirty days (2) after receipt of the complaint and notify the taxpayer accordingly.
Terms of payment 6. The Commissioner-General may grant terms for the payment of assessed amounts and outstanding arrears.
Remission of tax The provisions of this Act shall not derogate from the powers of the 7. Commissioner-General to remit tax under an Act administered by the CommissionerGeneral.
Administrative guidelines The Commissioner-General may issue administrative guidelines as may be 8. required for the purposes of this Act.
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