Africa Health Research Organization is situated in PO Box AN6731, Ghana. The payment of the withheld tax and filing of the withholding tax return must be done by 15 September 2018. Failure by an entity to file an income tax return will automatically result in a late filing penalty (calculated at a monthly rate of TZS 225,000 ). Sections 97(3)&(4) of Act 896 makes the income of a religious organisation exempt from tax except income attributable to business. At a glance, it may appear a lot of our religious organisations whose activities fall within the above-mentioned conditions for VAT registration may not have registered with the Ghana Revenue Authority. Are there any tax credit for Solar and are there any tax holidays for investments of over 30 million dollars, Kindly update the monthly and annual income tax rates and the VAT and NHIL as well. There are two interpretations to this finding. In Ghana, tax is deducted from an employee's personal income at source through a 'pay-as-you-earn' scheme. STEP 4- Company limited by guarantee regulations form. From the historical analysis above, there are key underlying themes running through all the various tax dispensations. But based on the very nature of government expenditure-process and on the ability to pay, many would reasonably argue that those employed in other areas of the private sector must be equally tax compliant. The economic slowdown had a considerable impact on households. To fund development, especially public infrastructure, with any stamp of country ownership and unburdened by donor conditionalities, requires that Ghana strengthens its ability to raise domestic tax revenue; however small. File Annual Returns at Fifty Ghanaian Cedi (GHS 50) together with Audited Account. Instead, when the NGO has met the predefined criteria and has a ruling to be recognised as a charitable organisation, then it will be granted an additional tax deduction equal to 25% of its income. However, obtaining the charitable status does not amount to income tax exemptions. Non-resident individuals pay taxes at the flat rate of 25%. any function other than those that the entity is established to operate; and, iii. Lastly, the income that is being exempted should not confer private benefit. If you are an established business operating in Ghana, one of your key obligations is to pay your taxes. That said, for tax purposes, the taxman may be unconcerned with how the income is generated. However, if an NGO working for women empowerment earns profit by selling off the handicrafts made by the women employed by them shall not be made taxable. Adjacent. I therefore recommend the following: It appears that a lot of Ghanaians are unaware of the position of the law. More likely, it is their employers that may be at fault. The survey sought to find out from the respondents about their profession, where they work, for whom they work, and whether taxes were deducted from their pay in the course of the survey period. VAT is applicable on all taxable supply of goods and services provided in, and imported into Ghana unless exempt. Any other excisable product prescribed by the Finance Minister. A deduction to the extent of 100% of the contribution made if it has been made to the following: a) The National Defence Fund or the Prime Ministers National Relief Fund, b) The Prime Ministers Armenia Earthquake Relief Fund, c) The Africa (Public Contribution-India) Fund, d) The National Foundation for Communal Harmony, e) The Chief Ministers Earthquake Relief Fund, Maharashtra, f) The National Blood Transfusion Council, k) The Andhra Pradesh Chief Ministers Cyclone Relief Fund, 1996, m) The Chief Ministers Relief Fund or Lieutenant Governors Relief Fund, in respect of any State or Union Territory, as the case may be, subject to certain conditions, n) The University or educational institution of national eminence approved by the prescribed authority, o) The National Sports Fund to be set up by the Central Government, p) The National Cultural Fund set up by the Central Government, q) The Fund for Technology Development and Application set up by the Central Government, r) The national trust for welfare of persons with autism, mental retardation, cerebral palsy and multiple disabilities. The Federal Inland Revenue Service (FIRS) recently issued Information Circular No. To this end, the following sectors deserve the attention of the Internal Revenue Service (IRS): manufacturing (small and medium size firms), the hospitality enterprises, construction and transportation sectors, and professional service providers. By occupational classification, the highest compliance rate could be found among those who worked in administrative and managerial positions, professional and technical skills jobs, and those in clerical jobs. These exemptions are to be outlined during filing. Income tax in Ghana can range from 0 to 25 percent, and you need to be sure you are placed in the correct tax brackets. I summarize below the information from the survey carried out from August 1998 to March 1999. Fifth, while there is a constant push to raise taxes from the informal sector, policy-makers must weigh the cost of the enforcement and the equity-efficiency concerns in order to determine how and where best to allocate the tax collection effort. Be that as it may, the following are clear. The expenses in the Profit and Loss statement must be traced to the cash book, with supported payment receipts accordingly, The salaries and wages figure in the Profit and Loss tally with the PAYE filings. Penalty for late filing of tax returns are. iii. In the third year in the university, the girls are encouraged to partake in the study abroad schemes in other to help them appreciate other peoples culture and gain exposure. Redempta Maira is a Senior Manager, Tax Services at PwC. There is no reason to believe that the individuals who did not have taxes deducted at source are inherently non-tax complaint. The person/ entity making donations can avail this benefit only if the NGO receives a certificate under 12A and 80G. For sure, this is not limited to withholding payroll taxes. The increase in tax revenue since the early 1990s is often cited as one of the achievements of Ghanas economic reform; thanks to increase in the base of taxation, changes made to the tax structure, and reorganization of the tax institutions. The NGO also functions in some areas of West Africa as follows: Benin, Burkina Faso, Liberia, Nigeria, and Sierra Leone. Of government employees, withholding taxes covered about 68% of those who worked in the utilities. 10, Plot 48, Osu Badu Road/Broadway, Accra, Ghana. Subsequent to the above, the current practice is that the Church will have to procure Tax Credit Certificate (TCC) from the Ghana Revenue Authority to serve as evidence of payment of provisional taxes by the suppliers or service providers. Includes transportation by bus and similar vehicles, train, boat and air. Company registration documents including certificate of incorporation and commencement, form 3&4 and regulations (for companies in the old system) or Certificate of incorporation, form 3 and Constitution (for companies in the new system). However, NGOs make efforts to pay fair wages to their workers. The questions I seek to address in this contribution are as follows: a. An expense that is of a capital nature includes an expense that secures a benefit that lasts for more than twelve (12) months. Signing up on Ghana.GOV. An expense is deductible if it is wholly, exclusively and necessarily incurred by the person in the production of the business or investment income for the year. 21ST CENTURY INITIATIVES A local NGO which uses Drama as its mode of Education a non for profit for poverty reduction,health and education assistance for Ghanaian communities. Some paid up, some negotiated to settle years of overdue taxes to avoid the dishonour of business closure. In explaining what constitutes public character, the learned judge said business was of public character did not confer any private benefit to individuals. He further said that, for as long as the appellant was a Company Limited by Guarantee, there was a legal assurance that its business was not conferring any private benefit on individuals. The court concluded that an education institution of a public character is not subject to income tax during the said period it remained as a Company Limited by Guarantee until such time that it converted into a Company Limited by Shares. I hope it wouldnt take a court to compel the CG to do what he is supposed to do. The NGOs which cannot generate their own income are completely depends on funders to pay their employer cost. they are socially, politically, economically educationally and even morally helpful to the country. . The KPMG International member firm in Ghana has obtained further clarity from the National Pensions Regulatory Authority ("NPRA") concerning the NPRA's March 2017 guidelines on expatriates' registration for and participation in Ghana's pension scheme. Notwithstanding the fact that a religious organisation is not required to pay income taxes on receipts incidental to their objects, the law requires them to file their corporate income tax returns with the Ghana Revenue Authority within four month after each financial year of the organisation. And to achieve that, the tax burden must be shared equitably on the basis of ability to pay. b. Profits earned by NGOs can be channelized in the most effective way if so is desired for. The purpose of the law with regards to the activities of religious organisations is to, among others, specifically empower the CG to approve an entity as a religious organisation, revoke the approval for a good cause or in contravention of the requirement of the law. The entity is established to operate as a religious institution which is of a public nature, b. Following from the foregoing, it is my humble opinion that the business income of a religious organisation is not subject to tax insofar as the income does not confer private benefit to individuals. Such pernicious inequities in the tax burden have in the past contributed to smuggling in no small measure of exports. https://www.myjoyonline.com/notion-that-people-set-up-ngos-to-enrich-themselves-false-stakeholder/-------https://www.myjoyonline.com/notion-that-people-set-up-ngos-to-enrich-themselves-false-stakeholder/, Daily: 0.30p | Weekly: GHS 2 | Monthly: GHs 9, Fake NGOs colluding with funding organisations for leaked funds AAG Country Director, African farmers, NGOs, faith leaders to demand end to failed Green Revolution, B-HECK Africa NGOs Alliance to honour Juabenhene, others for contribution to local governance, development, Budding entrepreneurs advised to steadily nurture their businesses, NGOs, CSOs join All-Africa Students Union against child labour, Gender-based violence, harassment at workplaces widespread in informal sector Survey, GES policy draft weakens civil societys ability to demand accountability CSOs, Nutrition and post-harvest losses sub-committee inaugurated in East Gonja, LIVE: Nigeria election 2023: Latest presidential and parliamentary results, We are not backing down unless there is force majeure Deputy EC chairman on CI, Ada Traditional Council calls on government to honour Atsu with monument, Ghana Card wont be used to vote in 2024 election Jean Mensa, Playback:Jean Mensa, Attafuah brief Parliament over controversial CI proposal, 2022 FIFA Awards: Real Madrids David Alaba racially abused after voting for Messi ahead of Benzema, Kwaku Agyeman Manu given 2 hours to appear before Health Committee over vaccines shortage, The Best Awards: I dont decide alone David Alaba explains voting Messi ahead of Benzema, Bola Tinubu wins Nigerias presidential election against Atiku Abubakar and Peter Obi, Ghana Police media blackout: How a nationwide veto is feeding speculation and disinformation, The 10 Youth Resource Centres that have become Bush Resource Centres, Ghana Month: Prime Minister Nkrumahs review of Ghana a year after Independence, Ghana Month 2023: Joy FM promises listeners top-class Ghanaian content, Gender gap in access to finance widened to 11% in 2021; BoG committed to closing it, Approval of new Ministers likely to be subjected to secret ballot. BUT WHY SHOULD I PAY PAYE FOR WAGES? The withheld tax must be paid to the Ghana Revenue Authority within 15 days following the month to which the payment relates. This appears not to be the case now. Where is the Russian oil stashed in Ghana? (It must be proved and signed by directors of the company at the Annual General Meeting of the company). Pay as You Earn (PAYE): The law exempts NGOs as an entity from paying taxes on non-profit related income as explained above. These originate either from the foreign offices of the developed countries or from the multilateral organizations set up by different countries such as the United Nations, the World Bank, the Asian Development Bank. A provisional tax assessment is raised on all businesses yearly, including new business registrations. It should be noted that in a situation where the assets are in the name of the church but are being used for the personal benefit of the pastor, the collateral benefit or benefit in kind should be assessed to tax in the hands of the pastor as required by law. Therefore, the applicable withholding tax rate is 3%. As well as paying tax in Namibia, you might also still be eligible to pay some . G31, G-Line, Patase Estate, Kumasi, Ghana. The CG has issued practice notes to serve as a guide in the implementation of the law in this regard. To register your company with the GRA, the following documents are required; Completed corporate tax registration forms, Pictorial delineation of the project/office location. If you own an SSBI, you also do not have to pay any profit tax. Annual income tax rates (Effective January 2022) , Monthly income tax rates (Effective January 2022) . Obviously, the employment income of the pastor of US$100,000 and gift of US$50,000 couldnt have been enough to enable him make the kind of expenditure he made during the year. Ms Chisanga was commenting on government's decision to issue statutory instrument 103 suspending tax exemption facility for NGOs. d.The procurement of food and drinks may constitute goods. The GST law specifically defines the term . Tax In Namibia. STEP 3 Complete Company limited by guarantee form 3B. Initially it was exactly the scenario but with increase in unscrupulous practices these NGOs were made liable to pay tax and also allowed exemption. The tax is calculated on a deemed taxable income equal to 5% of the gross income, which is taxable at the nonresident rate of 48% in the case of companies. The programme should be segmented and tailored to meet the needs of each identifiable group for its effectiveness. This can be done where the operating vehicle is through the establishment of Trusts, for example. 3. The question is: whether or not a religious organisation is required to register for the VAT? As a result, for tax purposes, any profit generated by Trusts which have ultimate beneficiaries as individuals, exposes their business income to tax. The Non Governmental Organisations Act which is the parent legislation on NGOs in Uganda is itself silent about taxation of NGOs. When expanded it provides a list of search options that will switch the search inputs to match the current selection. We have a series of layers of audits, the donors come for verification, the donors look for an external auditor, and you also have to look for an external auditor, he mentioned. An entity of public character is required to have its membership open to the general public or an identifiable group of persons, to operate without profit motive, not to distribute profits generated from its charitable business and to have its profits ploughed back and used solely for the original charitable function. e.The photography services constitutes services. Other donations to the church amounted to US$800,000. Providential Aid Organization is situated in Kumasi, Ghana. Income of religious leaders and/or employees of religious organisations. Exempt amounts include: Salary, allowances, facilities, pension and gratuity of the President; Income directly connected to the Government or local authorities' activities; So, if at a practical level an NGO is treated as deriving business income (being the funding it receives), how does the law then ensure that the NGO is not taxed on these receipts. 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