Tuesday, 28 May

Ghanaians to pay tax on foreign incomes

Business
Finance Minister Dr. Mohammed Amin Adam acknowledged the necessity for new measures to rejuvenate the economy

The Ghanaian government plans to fill the revenue gap resulting from the abandonment of the value-added tax (VAT) on electricity by implementing a tax on the foreign incomes of resident Ghanaians.

Earlier this year, the government introduced a VAT on electricity, but it faced significant public backlash and was subsequently dropped, leading to a revenue shortfall of around GH¢1.8 billion.

Originally, the VAT on electricity was part of Ghana's revenue measures agreed upon with the International Monetary Fund (IMF).

However, its abandonment created a gap in revenue collection.

To address this gap, the government intends to ensure compliance with a tax on the foreign incomes of Ghanaians who have lived in the country for 183 days or more.

Ms Julie Essiam, head of the Ghana Revenue Authority (GRA), clarified that this measure targets resident Ghanaians, not those living abroad.

She emphasised that although this policy existed previously, its implementation has not been optimised.

Furthermore, the GRA announced a voluntary disclosure opportunity for taxpayers to declare their foreign income accounts within three months, with interest waivers for compliant taxpayers.

Ms Essiam stated, "Its implementation has begun because the team is mobilising themselves and drafting the letters to be sent to individual account holders. So, by the 2nd of May, those letters might have gone out."

Finance Minister Mohammed Amin Adam acknowledged the necessity for new measures to rejuvenate the economy and urged Ghanaians to support the government during this process.

Source: classfmonline.com