Income tax refers to a type of tax that governments impose on income generated by businesses and individuals within their jurisdiction.  By law, taxpayers are required to file an income tax return annually to determine their tax obligations.  Simply put, income taxes are sources of revenue for government to fund public services and provide goods for the citizens.

Personal income tax is a type of income tax that is levied on an individual’s wages, salaries and other types of income while business income tax applies to corporations, partnerships, small businesses and people who are self-employed.

GRA AND INCOME TAX COLLECTION

In accordance with the Income Tax Act 2015 (Act 896), the collection of these taxes falls within the jurisdiction of the Ghana Revenue Authority (GRA).  It is the agency that is mandated by law to collect taxes on all forms of income such as wages, salaries, commissions, investments and business earnings.  These personal income taxes can help fund government programmes and services such as national security, roads, schools, provision of water and electricity among others.

To facilitate the collection of these taxes, a Taxpayer Identification Number (TIN) has been designed by the GRA to determine people who are qualified and liable to register and pay taxes to the state.

PAYMENT OF TAXES WORLDWIDE

All over the world, paying your taxes is considered a civic duty, although doing so is also a requirement of the law.  If you do not pay your taxes, the government agency that oversees taxes, will require you to pay, failure of which will attract penalties such as fines or imprisonment.  Nobody irrespective of your status in society is above the law in this regard.  Whether you are a lawyer, medical doctor, engineer, etc. you have to fulfil your civic obligation of paying tax.

Under the tax law, it is the employer’s responsibility to file a monthly tax returns on behalf of its employee.  The employer is required to withhold the employee’s taxes to pay to the tax agency.  Taxes withheld, must be filed and payment made by 15^th of the month following the month in which these taxes are withheld.  Additionally, the employer, shall not later than 30^th April following the end of every year of assessment, furnish an Employer’s Annual Tax Deduction Schedule which shall specify tax withheld in respect of each employee.  The return is required to outline salaries paid to each employee, exemptions, tax reliefs, chargeable income tax due and tax paid.

PROFESSIONAL BODIES AND THEIR TAX OBLIGATIONS

  It is worthy to note that these obligations under the law apply to countries worldwide including our own country, Ghana, and our professional bodies are quite familiar with the provisions under the Act.  It is, therefore, surprising to hear that about 6,000 lawyers in the country are not filing their income tax.  Besides, many doctors and over 60, 000 business people have been evading tax of which the Ghana Revenue Authority (GRA) is fully aware and has a reliable data on them.

PRESIDENT LASHES AT LAWYERS FOR FAILURE TO PAY TAXES

This revelation came to light recently when the President, Nana Addo Dankwa Akufo-Addo, addressed the Ghana Bar Association’s 2021 conference at Bolgatanga in the Upper East Region.  He described the failure of some lawyers in the country to pay their taxes as embarrassing.

“It is embarrassing that lawyers are often on top of the list of those who flout our tax laws and use their expertise to avoid paying taxes.  They appear to think that being members of the learned profession puts them above compliance with everyday duties like paying taxes,” the President said, adding that “they will soon be receiving friendly calls from the tax authority.  I sincerely hope that those involved will swiftly move to regularise their tax affairs before the GRA moves to crack the whip”.

It is a shame that lawyers who parade as learned professionals should abandon their civic responsibility of payment of taxes on their earnings.  This unhealthy situation would have been kept under the carpet if the president had not highlighted the issue at the GBA conference.

APPLYING THE NECESSARY SANCTIONS AGAINST DEFAULTING LAWYERS

 The GRA needs to calculate the amount involved on individual basis and apply the necessary sanctions, especially payment of interests on the amount to serve as a deterrent to others.  Similarly, other professionals such as the doctors who have defaulted in the payment of their income taxes must also face similar consequences.  If an ordinary worker defaults in the payment of income tax, the GRA will be on the neck of that fellow.  Besides, officials from the GRA have been moving from shop to shop as well as other small scale businesses closing them for failure to honour their tax obligations and applying sanctions.  What type of country is this, in which the laws are rigidly applied to certain group of people and individuals while others are let off the hook? That is interesting and amazing!

GRA OUGHT TO BE BLAMED FOR THESE INCOME TAX SHORTFALLS

The Ghana Revenue Authority must take the blame for its failure to act when it first discovered this anomaly in spite of all the facilities it has including the PIN numbers of the defaulters and to allow the numbers to increase to this magnitude.  What then is the essence of acquiring these TIN numbers which people have to struggle to get from the GRA?

It is a fact that if we continue to behave in this way where those who are qualified to pay taxes that are ‘badly’ needed to develop this country are shying away from that obligation, our country will never witness any progress in its development.  The question that many Ghanaians will be asking is that; Do these defaulting lawyers have the morality to defend people who have defaulted in their obligations, when they themselves, are the worst offenders?  This negative behaviour on the part of these lawyers and other professionals can be one of the corrupt practices we have been experiencing in this country which we must deal with as a nation.  It is not only when you dip your hands into state coffers and steal funds meant for development that makes you corrupt but also, the failure to fulfil your tax obligation as required by law.

LATE FORMER PRESIDENT PROFESSOR MILLS’ OBSERVATION

The situation as it stands now will make one to suspect that some officials within the tax collection agencies have been colluding with people in influential positions to evade taxes thereby denying the state money needed to carry out development projects in this country. The late former president John Evans Atta Mills of blessed memory, saw what happened years back when he paid an unannounced visit to the CEPS offices and spoke vehemently against the practice.  He saw a situation in which young personnel who had gained employment to these tax collection institutions had become millionaires overnight and acquired huge mansions and expensive vehicles through some of these dubious and obnoxious practices at the expense of the state.

WE NEED THESE TAXES TO BUILD THE NATION

This country needs to develop to an appreciable level and it is some of these taxes that can be used to carry out this agenda.  Therefore, we need to be stringent and meticulous in the collection of our legitimate taxes to prosecute this ambitious development.  The IRS and other tax collection bodies in the country need to rise up to the challenge of raking in the needed revenue for the state.  Our professional bodies must also encourage their members to pay their legitimate taxes to the state.  Anything short of that is an affront to our democratic advancement.

Contact email/WhatsApp of author:
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By Charles Neequaye