GRA clarifies tax status of ‘resident individuals’ as legal; encourages general compliance


GRA clarifies tax status of ‘resident individuals’ as legal; encourages general compliance

The Ghana Revenue Authority (GRA) has clarified the tax status of resident individuals as backed by law and must have general compliance.

In addressing recent concerns by the public as to whether individuals who earn incomes abroad fall in the category of ‘resident individuals’ as per the country’s tax laws, the Authority has made vivid explanations on the matter.

In a statement to the B&FT, the GRA explained that individuals considered resident for tax purposes include citizens with permanent homes in and residing in the country throughout the year and those who are present in Ghana for at least 183 days in any 12-month period that begins or ends within the year.

The rest are officials posted abroad as well as citizens temporarily absent in Ghana for not more than 365 continuous days with permanent homes in the country.

These categories of persons, according to the GRA, is grounded in a legal definition of resident individuals for tax purposes in the Income Tax Act 2015 (Act 896), section 101.

Call for compliance

In its quest to facilitate easier declaration and payment for resident individuals to report undisclosed incomes, the GRA has opened a special window for taxpayers to rectify their records. The Authority strongly encourages all eligible individuals to utilize the opportunity to regularize their tax affairs.

“Based on the above, ‘Resident Persons’ are enjoined by the relevant tax laws to disclose all their incomes sourced in Ghana and abroad by filing their returns accordingly. Further, Resident Persons are encouraged to take due advantage of the Voluntary Disclosure Programme (VDP) under section 74 of Act 915 as amended in 2020 to regularize their tax affairs with the GRA to avoid imposition of sanctions” the statement said.

Who is a Resident Person for tax purposes in Ghana?

Apart from carefully defining ‘Resident Person’ as an individual for tax purposes according to the country’s laws, the GRA noted that in generality, a resident person may also include a company, a trust, a partnership, or any other persons, who according to the laws of Ghana, is liable to tax by reason of that person’s domicile, residence, place of incorporation, place of management or any other condition of that nature.

Possible sanctions for evasion/avoidance

The GRA emphasizes that any resident person who fails to comply with the relevant tax laws including compliance with VDP may face sanctions including criminal prosecution for a tax offence arising from non-disclosure; penalties for making false or misleading statement as specified under section 74 of the Revenue Administration Act 2016 (Act 915).

Other sanctions may include, administrative non-compliance penalty that was or may be imposed under a Tax Act and any penalty imposed under a Tax Act, including penalty for late filing of a return.

GRA is a partner in tax collection

The Authority has always leveraged cooperation with individuals and businesses in its tax collection agenda and encourages citizens to willingly honour their tax obligations. The GRA has in recent years sees itself as a partner in tax collection with the citizenry.

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