Taxes are inevitable. Whether you own your own business or work for someone else’s, taxes serve a fundamental role in funding the salaries of government workers and supporting common resources like paved roads and well-equipped taxes.
On Tuesday at Mövenpick Ambassador Hotel in Accra, Joy Business – powered by PwC – hosted an informative discussion designed to engage the public on paying taxes intelligently. The event, called “Intellitax,” is in part of Joy Business’ Knowledge Series.
“For a lot of entrepreneurs, everyone thinks of direct taxes because it’s what hits you,” said Gifty Andzie, a PwC consultant. Andzie explained that in some cases, business owners sometimes unintentionally forget to itemize personal deductions causing setbacks when audits arise.
She added that the amount one pays for taxes is not “one-size-fits-all.” There are many kinds, including a “corporate income tax,” a tax levied by the government and is assessed based off of the company’s profits. For small- and medium-sized enterprises (SME’s), corporate taxes can be reduced to a “modified taxation,” which sets a criteria stating that if a business owner earns less than GH¢200,000, among other conditions, the GRA allows the business to pay only 3% taxes off of its revenue.
Then there is the “young entrepreneur regime,” says Gifty Matey, a senior manager at PwC, who says the regime targets people that are 35 years and younger. Businesses owned by those in this category are exempt from paying taxes for five years.
“If you miss some compliances and forget to do something, the employer is targeted. Do not treat payroll items as non-taxable items,” she advised.
For instance, if an employer gives an employee GH¢1,000 gift for a job well done, that money is taxable and it is the employer’s responsibility to ensure so.