RENT TAX COMPLIANCE IN GHANA (A CASE STUDY OF BOLGATANGA MUNICIPALITY
CHAPTER ONE
INTRODUCTION
1.1 Background of the study
The Ghana Revenue Authority (GRA) is stepping up the collection
of tax on rent income from owners of residential and commercial properties
following the re-launch of the tax in Accra. Though it has been in the statute
books since 1973, compliance with the tax, which is charged at 8% of gross rent
income, has not been encouraging and the GRA said it will increase efforts to
collect the tax, especially since the real estate sector is witnessing a boom.
It has become necessary, after assessing the performance of the
tax on rent income as a percentage of total GRA collections, for us to
re-strategize to ensure that the tax takes a respectable position among the tax
types, said George Blankson, GRAs Commissioner-General. There is a strong
believe that there is a boom in the real estate sector. Unfortunately, the tax
revenue from this sector does not correspond to the boom we are experiencing. Available
data show that the contribution of rent income tax to total direct tax
collections was 0.42% in 2011, representing GH15.92 million out of GH3.75
billion in direct taxes. In 2012, the tax contributed 0.32%, representing
GH17.48 million out of GH5.4 billion. As a share of total GRA collections, rent
income tax registered 0.14% in 2012.
We are very much determined and committed to enhancing the
contribution of the tax to total GRA collection in 2013 and beyond, said Mr.
Blankson, adding that the Authority will ensure full implementation of the
renewed directive by collaborating with public bodies and private organizations
to enable it gain access to relevant information for assessment purposes.He
said the GRA will engage with institutions such as the Electricity Company of
Ghana, Ghana Water Company, the Lands Commission, Ghana Real Estate Developers
Association, Ghana Institution of Architects and the Ghana Institute of
Engineers who deal with property owners.
Speaking at the event, Minister of Finance Seth Terkper said the
re-launch of the tax is timely and has come at a period when the nation needs
to mobilize every available tax revenue to cover rising expenditure.He said the
2013 budget is focused on revenue generation through expanding the tax-base and
improving the efficiency of tax administration.Any new initiative in this
regard is therefore welcome. For me, the re-launch and the emphasis that is
being given to the tax on rent income is an indication of the preparedness of GRA
to broaden the tax-base. I charge the GRA to come up with many new ideas in
this direction, he said.
Even though the housing sector is one area where the tax
potential is huge, we have not derived much revenue from this sector for
various reasons. Therefore any fresh initiative which aims at breaking the
barriers and increasing compliance is very much welcome and appreciated, he
added.The rent income tax law, LI 1698, also obliges institutions and corporate
bodies to withhold the tax whenever paying rent to property owners.
The GRA said it is targeting companies, financial institutions,
partnerships, educational establishments, medical establishments, corporations,
government agencies, consular offices, and international organizations in its
renewed attempt to improve collection of the tax.
1.2 Statement
of the problem
Knowledge
about taxation, the benefits of taxation and the dangers of non-compliance
remain a key impediment to tax compliance in many countries. Countries such as
the US, Canada, Japan, New Zealand, Australia, the UK and Malaysia have all
been implementing a continuous tax education for taxpayers and children as
future taxpayers (Palil, 2010). Various countries such as the USA, the UK and
Australia also have developed interactive websites, disseminated leaflets
together with tax returns, opened call centers’, created advertisements or
supplied reminders via television and radio (e.g. to remind taxpayers of
deadline dates for filings)
1.3 Objectives
of the study
1. To ascertain the level of rent tax compliance
of the people of Bolgatanga Municipality in Ghana.
2. To determine the effects of taxation on
Ghana’s economy.
3. To determine the challenges of taxpayers
in Bolgatanga Municipality.
4. To recommend ways of tackling these
challenges.
A Research proposal for rent tax compliance in ghana (a case study of bolgatanga municipality:
Reviews: A Review on rent tax compliance in ghana (a case study of bolgatanga municipality, rent, compliance, ghana project topics, researchcub.info, project topic, list of project topics, research project topics, journals, books, Academic writer.
The Ghana Revenue Authority (GRA) is stepping up the collection of tax on rent income from owners of residential and commercial properties following the re-launch of the tax in Accra. Though it has been in the statute books since 1973, compliance with the tax, which is charged at 8% of gross rent income, has not been encouraging and the GRA said it will increase efforts to collect the tax, especially since the real estate sector is witnessing a boom... accounting project topics
RENT TAX COMPLIANCE IN GHANA (A CASE STUDY OF BOLGATANGA MUNICIPALITY