Resident persons risk prosecution for failure to disclose incomes – GRA

Resident persons who fail to disclose their income earned from abroad for tax regularisation risk sanctions including criminal prosecution, the Ghana Revenue Authority (GRA) has cautioned.

Commissioner-General of GRA, Julie Essiam, said the Authority would further impose penalties for making false or misleading state­ment, as specified under section 74 of the Revenue Administration Act 2016 (Act 915), and administrative non-compliance and Tax Act pen­alties, all aimed at deterring others from being non-compliant to the tax laws.

Per the GRA, one qualifies as a resident person for tax purposes if the individual has a permanent home in Ghana, and resides in the country throughout the year, stays in Ghana for at least 183 days in any 12-month period that begins or ends within the year.

These include government em­ployees or officials posted abroad or temporarily absent from Ghana for not more than 365 continuous days but maintain a permanent home in Ghana.

She has, therefore, charged resident persons to take advan­tage of the Voluntary Disclosure Programme (VDP) introduced by the Authority to disclose all pre­viously undisclosed income, asset and wealth held abroad to GRA without incurring any sanctions, a statement issued in Accra yesterday noted.

The VDP, she explained, was in accordance with section 74 of the Revenue Administration Act, 2016 (Act 915), which enjoins resident persons to disclose all their incomes sourced in Ghana and abroad by filing their returns accordingly.

Ms Essiam said the enforcement of this tax law had become neces­sary due to some resident persons hiding their income, asset and wealth outside their home jurisdic­tions to evade taxes.

“Some resident persons are able to hide their income, assets and other wealth through creation of various corporate entities and arrangement interposed activities, and through other non-financial in­struments such as cryptos, making it difficult for tax authorities using their domestic laws to investigate and audit cross border tax planning and evasion activities,” she added

In response to the cross border tax evasion, avoidance and plan­ning activities “as consequences of globalisation and digitisation,” Ms Essiam said, the GRA joined the Global Forum on Transparency and Exchange of Information for Tax Purposes of the Economic Cooperation and Development (OECD) and subsequently signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (MAC) in 2012.

The MAC, which have about 147 countries, she said, facilitates international co-operation be­tween countries in the exchange of information, including auto­matic exchanges, to the recovery of revenue/tax claims, joint tax examinations abroad, simultaneous tax examinations abroad for the assessment and collection of taxes.

Additionally, the Commis­sioner-General said, Ghana had ratified the Multilateral Competent Authority Agreement (MCAA) for Common Reporting Standard (CRS) to automatically exchange financial account information on reciprocal basis with other foreign jurisdictions in 2015 and enact­ed the Automatic Exchange of Financial Account Information Act, 2018 (Act 967) to effectively implement MCAA (CRS) in 2018.

She noted that the international cooperation would help in im­proving domestic tax transparency and coordinate global response to tackle tax evasion and avoidance activities and deterrence to tax evaders.

“In view of our cooperation with other countries in order to exchange taxpayer information bordering on financial account information, bank statements, ad­dresses, taxes paid outside Ghana, tax resident status, among others, concerning any tax resident person in Ghana, from other jurisdictions, resident persons may not be able to hide their wealth, asset and income from GRA,” Ms Essiam stated.