Emmanuel Kofi Nti, GRA Boss
The Ghana Revenue Authority (GRA) will start imposing seven percent VAT Withholding Tax on individuals and entities that transact business with the Ministries, Departments and Agencies (MDAs), this year.
“What we are seeking to do is that if a person charges 17.5 VAT on build-up cost of an item, the person is supposed to account to GRA seven percent VAT Withholding Tax which is about 40 percent of VAT,” Oduro Yeboah, an Assistant Commissioner in-charge of Statistics at the GRA, said.
Mr Yeboah disclosed this at the closing ceremony of Chief Directors Policy Dialogue in Accra on Friday.
The dialogue was jointly organised by the United Nations Economic Commission for Africa and the Ministry of Foreign Affairs and Regional Integration.
It is intended to fashion out effective strategies and policies, as well as build synergies to support the promotion of rapid inclusive economic growth of the country.
Making a presentation on the Administration of International and Domestic Tax Revenue – The Perspective and Expectations of the GRA, he said the chief directors of the MDAs are supposed to withhold the amount when making payment for supply of goods and services to persons and contractors.
“As heads of the MDAs, you are supposed to withhold the taxes when payments are being made to individuals and entities that execute contracts and supply goods and services, and pay those revenues to the GRA within a month. Failure to do so would attract 125 percent interest on the amount,” he added.
The assistant commissioner, however, stated that MDAs that rent out residential facility are supposed to charge eight percent, non-residential (commercial) would attract 15 percent withholding tax, while accommodation facilities for chief directors and board members would attract a rate of 20 percent on gross amount.
Mr Yeboah said: “If it is the supply of goods, three percent, supply works is five percent, and supply of services is 7.5 per cent. For instance, for supply exceeding GHc2, 000 is three percent, supply works exceeding GHc2,000 is five percent and supply of services on gross amount is 7.5 percent.”
Mr Yeboah said the Commissioner-General of the GRA would also appoint VAT Withholding Tax agents to charge the tax, adding that Section 114 of the Income Tax Law, Act 896, mandates the MDAs to collect those taxes.
He said the GRA’s core mandate is to mobilise revenue through collection of taxes into the Consolidated Fund to support government’s development efforts.
The GRA projected to collect GH¢39 billion this year.
He said GRA would collaborate with the Ministry of Local Government and Rural Development to increase the mobilisation of property tax this year.
Rev Yeboah said GRA is on course to registering all taxable persons in the country and entreated Ghanaians, who are 16 years and above, to apply for Tax Identification Numbers (TIN).
He said that persons, who fail to secure TIN, would not be able to transact business with government and would be refused tax clearance certificates.
-GNA