Some financial analysts have described as ambitious, the Ghana Revenue Authority (GRA)’s decision to impose 10 percent withholding tax on the operations of small scale mining businesses.
They believe the absence of a formal structure to co-ordinate the activities of these small scale miners will impede the objective of the revenue collection agency.
Under the new income tax law, purchasing unprocessed minerals is expected to attract a 10 percent withholding tax.
But a partner at Ernst and Young, Isaac Nketiah Sarpong believes compliance will require adequate sensitization and harmonization of activities.
“For now I must say it appears a bit ambitious but if we continue on that line then when will we get to go as a country. I think everybody must pay and to the extent that they are making revenues from whatever activity they are engaged in, they may have to pay the taxes,” Isaac Nketiah Sarpong noted.
He added, “Some of these guys may be rowdy and resist any attempt for the withholding tax to be charged on the income payable to them. So it will be important to get them and regularize their activities and educate them on the need to pay taxes.”
Compliant businesses to be exempted from withholding taxes
Meanwhile the GRA is within the coming weeks, expected to disclose the full list of compliant businesses to be exempted from paying withholding taxes for at least a year.
President of the Canada Ghana Chamber of Commerce, Salah Kalmoni, who welcomed the move, also tells Citi Business News it will be an incentive to ensure voluntary compliance from other businesses.
“The chamber was very happy that even though now they have suspended withholding tax, they are considering on having new rules because a lot of professional businesses are already paying,
“This will also help our members because the 15 percent is just so much; our profits are not even up to the 15 percent it will also help the serious Ghanaian businesses which comply with the law,” Salah Kalmoni stated.
By: Pius Amihere Eduku
