She emphasised the importance of tax compliance and said it was not a new measure. Ms Essiam said it had existed in the tax laws although its implementation had not been effected until recently when the country started receiving information on foreign accounts held by resident Ghanaians in other jurisdictions.

She said the GRA, through the support of the Organisation for Economic Co-operation and Development (OECD) had refined its processes and structures to ensure effective implementation of the tax compliance measure.

Ghana is one of the five African countries approved by the OECD to share information on financial accounts of resident persons.

 

Legal basis

Explaining the legal basis for taxation in an interview with the Daily Graphic in Accra, Ms Essiam cited Article 174(1) of the 1992 Constitution which says that taxation could only be imposed under the authority of an Act of Parliament.

She said resident persons were required to disclose all their income sourced in the country and abroad, as failure to comply may result in sanctions, including criminal prosecution, penalties and administrative non-compliance penalties.

Ms Essiam said the nation's tax system had evolved over the years, from a territorial concept to a worldwide system. She said that repeal of previous Income Tax laws such as the NLCD 78, SMCD 5 and Act 592, which were replaced by the current Income Tax Act, 2015 (Act 896), introduced a global system of taxation for resident persons.

As a result, Ms Essiam said, the current Income Tax Act, 2015 (Act 896) taxed the total income of resident persons, including foreign-sourced income. Resident persons under Act 896 include individuals, companies, trusts and partnerships that meet specific criteria.

The Commissioner-General further mentioned conditions for an individual to be considered a resident for tax purposes to include citizens with a permanent home in Ghana residing in the country throughout the year.

Government employees or officials posted abroad and citizens temporarily absent from Ghana for not more than 365 continuous days but maintain a permanent home in Ghana also qualify as resident citizens.

By definition of the tax law, any Ghanaian or individual who lives in the country for 183 days in any 12-month period is also classified a resident Ghanaian. However, incomes of Ghanaians permanently residing abroad are not covered under the policy.

Ghana, she said, had joined international efforts to combat tax evasion and avoidance, including global forums on transparency, exchange of information for tax purposes and multilateral convention on mutual administrative assistance in tax matters (MAC).

Urging compliance with tax laws, Ms Essiam emphasised the importance of Section 74 of the Revenue Administration Act, 2016 (Act 915) as amended which allows residents to disclose previously undisclosed income held abroad without facing sanctions.