Introduction to taxation in ghana pdf

This course entails computation of taxable incomes and tax payable. Digital inclusion and mobile sector taxation in ghana. Direct tax was introduced in ghana to subject the assessable income of income earners to tax, but. Read it with the goal of gaining a broad understanding of tax purposes and principles. Income tax is levied in each year of assessment on the total income of both resident and nonresident persons in ghana. In the united states, the role of the government extends from providing for national defense to providing social security and medicare to the elderly. The views expressed in this publication are not necessarily those of fes ghana or of the organization for which the author works. Taxation in theory and practice lecture notes, lectures 1 10. This study reveals that, revenue acquired from this type of tax is considered very crucial in the development of the country, hence as major source of revenue to the government.

Taxation, imposition of compulsory levies on individuals or entities by governments. The general objective of this study is to examine the impacts of value added tax on revenue generation in nigeria. Section 3 is the full report on tax reform in ghana. Introduction to taxation lesson 1 learn taxation in 50. Tax provisions do not typically form a principal part of iias, partly owing to the existence of the tax specific dtts. Taxation in ghana principles, practice and planning. Get free research paper on a study into the challenges of personal income taxation in ghana project topics and materials in nigeria. Introduction direct tax play a vital tool for revenue collection in ghana. Tax is a compulsory contribution by person to the state to enable it meet its expenses for a common course. Section 2 spells out the objectives of tax system and examines the use of progressive taxation practices generally in africa to accelerate economic growth as a comparative basis for ghana. Abstract in 1998 ghanas government successfully introduced a value added tax vat. Tax treaties represent an important aspect of the international tax rules of many countries. Gra practice notes to income tax act, 2015 act 896.

One reason for the limited role of taxation provisions in iias is that the inclusion of taxation matters can sometimes unduly complicate and draw out iia negotiations and decrease the chances of successful conclusion. In the process of development, states not only increase the levels of tax ation, but also undergo pronounced changes in patterns of taxation, with increasing emphasis on broader tax bases, i. Why avoidance, evasion and administration are central, not peripheral, concepts in public finance most economic analysis of taxation presumes that tax liability can be ascertained and collected costlessly. Although the history is interesting, for 1 unit 01. To find our way around them, some sort of classification is necessary. Introduction to taxation government plays an important role in most modern economies. This is approved for students in accountancy, business, computer science, economics, engineering, arts. A comprehensive research on the introduction of taxes in ghana and related issues, responsibilities, benefits and punishment regarding income tax returns, income tax administration, capital allowance, capital gains tax, gift tax, taxation of insurance business, double taxation and management of revenue agencies are contained in the book. The united states is an example of a country that operates a worldwide system of taxation and is also party to a number of bilateral tax treaties. Critical overview of the urban informal economy in ghana. One reason for the limited role of taxation provisions in iias is that the inclusion of taxation matters can. The importance, effect, causes, relationship, comparison, history, role, solutions are discussed. Its system of taxing foreignsource income has had a great influence on other countries.

Taxation is a means whereby the state collects funds to pay for public services. The objective of this study is to investigate the impact of taxation on economic development of nigeria proxy by the gross domestic product gdp. The tax reform process in ghana took anot her form with the introduction of the investment code pndc law 116, 1985. On the general principles of taxation, as illustrating the advantages of a perfect income tax. Section 1 is the introduction and the context in which tax reform has been undertaken in ghana. The income tax regime has seen a number of changes since the. To examine the relationship between value added tax and revenue generation in nigeria to establish the effects of value added tax on revenue generation in nigeria 1. Taxes are levied in almost every country of the world, primarily to raise revenue for government expenditures, although they serve other purposes as well. The main sources of such revenue are tax and non tax revenue. Double taxation agreement dta is an agreement between two countries that a person living in one country shall not be taxed in both countries on the income earned in the other country. Introduction direct tax play a vital tool for revenue.

Resident persons are taxed on their worldwide income, while nonresident persons are taxed on income which has a source in ghana. Scope and extent of study the study is open to the administration of all taxes in ghana direct and indirect and is. Introduction objective of the course theory and practice in taxation objectivity and ideology economics of taxation is mathematics. Ghana is committed to entering into dtas with interested countries with the ultimate objective of freeing investment capital and thereby securing the investment.

Introduction to taxes video lecture part 1 youtube. The impact of taxation as an aid to economic development includes abstract and chapter one, complete project material available the impact of taxation as an aid to economic development in edo state a case study of oredo local government area, edo state, nigeria proposal the research work will discuss in. The government has shown an increasing desire to tax the informal sector, and has introduced several taxes to specifically target informal sector operators. Two hundred and fiftytwo respondents were sampled for the study using.

Ghana, country of western africa, situated on the coast of the gulf of guinea. Presumptive tax has been introduced as another form of assessment. Ghana is a member of ecowas, the african union, the commonwealth, and the world trade organization. Bird, tax policy and economic development baltimore. Governments in the world are faced with the issue of generating adequate revenue for the running of their countries at the state, regional, districts and local levels. It is in tune with these principles that the ghana integrity initiative gii, in line with its policy advocacy objective, has sought the assistance of oxfam novib, their funders to undertake an indepth empirical study into the present situation of taxation in ghana and to provide suggestions eventually to form the basis of advocacy. Taxation 2 iia issues paper series tax provisions do not typically form a principal part of iias, partly owing to the existence of the taxspecific dtts. But this success followed a failed attempt in 1995, when the countrys first vat was repealed after just three and a half months.

In order to provide for these program and services, the government needs revenues. However, in 2008 there were only minor changes with the focus on the reduction. For these and other reasons, it is critical not to divorce a system of taxation, or even taxation as a technical process, from the broader historical, political, economic, social and cultural context of which it is a part. Section 2 spells out the objectives of tax system and examines the use of progressive taxation practices generally in africa to accelerate economic growth as. Introduction to taxation taxes are the price we pay for a civilized society. Policy issues in selected major taxes 68 i introduction 68 ii personal income tax pit 70 a advantages of the pit 70 b limitations of the pit 72 1 the rate structure 72 2 the tax base 74 3 ineffective tax administration 76 c possible solutions 77. In other words, it is important to consider the tax culture of ghana. Generally, income has a source in ghana if it accrues in or. The study examined the awareness and level of compliance with gift tax by formal sector employees in kumasi metropolis ghana. Taxation of banking business 10 taxation of insurance companies general business 11 withholding tax on premium payments 11 life insurance business 11 taxation of retirement funds 11 payments sourced from ghana 11 income attributable to a permanent establishment12 branch profit tax 12 relief from double taxation 12 double tax treaties 12. Introduction the income tax regime has seen a number of changes since the internal revenue act, 2000 act 592 was introduced. The introduction of direct tax has been a vital tool for revenue collection in ghana. Full list of the countries ghana has signed double.

All tax laws should conform to the maxims of taxation equity 1. Although relatively small in area and population, ghana is one of the leading countries of africa and is celebrated for its rich history. Sales tax value added tax vat these are indirect taxes paid by consumers on some goods and services to the state through registered individuals or businesses. Gentlementhe duties of a government, as enumerated by adam smith, are four in number. A branch of any foreign company doing business in ghana is taxed at 10% on repatriated funds. The origin of tax law and its constitutionality is discussed along with a brief history of the different changes in rates that have occurred since the 16th amendment was passed. The definition of taxes a tax is a compulsory, unrequited payment to. Principles of taxation are those formal guidelines which are widely accepted andor discussed and should be considered whenever specific laws are proposed, discussed and implemented. Ghanas economic outlook may be mixed, but analysts remain hopeful, pointing to the stability and strength of ghanas democracy and society. Cambridge university press afrobarometer briefing paper no. Introduction to taxation our purposes, the sections on tax structure, types of tax, tax administration, and understating the tax law will be relatively.