Accra, April 12, GNA - The Ghana Revenue Authority (GRA) has held a seminar for Large Tax Payers to help deepen their understanding of the new Income Tax Law (Act 896) and also explain some misconceptions.
The seminar was in line with the GRA's desire to enhance education on the new Tax Law to ensure compliance and to work together with stakeholders to smoothen the rough edges for effective implementation.
Mr Kwaku Opoku-Agyemang, Assistant Commissioner and Acting Head of Large Taxpayers Office, said the aim of the seminar was to help keep the taxpayers abreast with the provisions of the new law and how to use it.
He said the main reason for the passage of the new Income Tax Law is to revise and consolidate the many scattered tax laws and amendments into one document, simplify the provisions of the Act and make it more user-friendly to enhance efficiency and facilitate compliance.
Mr Dominic Naah, Chief Revenue Officer, in a presentation on the various aspects of the new Income Tax Law, said Capital Gains Tax is no more a separate tax on its own.
He said gains realized on disposal of assets ('now called gain on realisation of an asset') or liabilities were to be included in business or investment income and taxed at the applicable income tax rate.
Besides, Gift Tax is also no more a separate tax on its own adding that gifts received in respect of employment, business and investment are to be included in calculating the gains and profits from employment, business and investment, he said.
Mr Naah said mortgage interest which previously was available for more than one residential building for individuals will now be restricted to just one building during the life time of that individual.
He said the law also allow for deductions for repairs and improvements, while research and development expenses may also be deducted irrespective of whether or not they are of a capital nature.
Mr Naah said the new Income Law has also introduced a full worldwide basis of taxation for residents that means residents will now be taxed on all incomes regardless of source and whether or not foreign income earned is brought into Ghana.
He said the Act 896 exempts from tax, gains made from realization of assets from merger, amalgamation or re-organization where there is a continuity of at least 50 per cent of the underlying ownership.
He said while in the past a 'private ruling' is binding only on the Commissioner General, the new Act makes such ruling binding on the applicant as far as the transaction in respect of which the ruling is given is concerned.
Mr Naah said individuals and companies granted temporary concessions from tax in specified sectors are required to pay 1 per cent tax on their chargeable income during the period of concession.