GRA To Charge 7% VAT Withholding Tax

The Ghana Revenue Authority (GRA) would, this year, begin charging seven percent VAT withholding Tax on individuals and entities that transact business with the Ministries, Departments and Agencies (MDAs). Revered Oduro Yeboah, an Assistant Commissioner in charge of Statistics at the GRA, said “what we seeking to do is that as a person is charging the 17.5 VAT on building up cost of an item, the person is supposed to account to the GRA seven percent VAT Withholding Tax, which is about about 40 per cent of the VAT.”

He made this known at the closing ceremony of Chief Directors Policy Dialogue in Accra on Friday. Making a presentation on the theme, “Administration of International and Domestic Tax Revenue- The Perspective and Expectations of the GRA”, Rev. Yeboah said the chief directors of the MDAs were supposed to withhold the amount when making payment for supply of goods and services to persons and contractors.

Rev. Yeboah, however, stated that the MDAs that rented out residential facility were supposed to charge eight per cent, non-residential would attract 15 per cent withholding tax, while accommodation facilities for chief directors and board members would attract a rate of 20 per cent on gross amount.

He said, “If it is supply of goods, three percent, supply works is five percent, and supply works is five percent, and supply services is 7.5 percent. For instance, for supply exceeding GHc2,000 is five percent, and supply of services on gross amount is 7.5 per cent.

He said the GRA’s core mandate was to mobilise revenue through collection of taxes into the Consolidated Fund to support government’s development efforts. The President’s vision of building “Ghana Beyond Aid” would only become a reality if chief directors supported that agenda , in order to increase domestic revenue to meet the country’s developmental needs, he said.

“The revenue that the GRA collects is what the Government uses to pay civil servants, doctors, nurses, police and everybody and enables the Government to provide infrastructure like roads, hospitals, schools and everything the nation needs. “he said.

The Policy Dialogue

The Dialogue was jointly organized by the United Nations Economic Commission for Africa and the Ministry of Foreign Affairs and Regional Integration. It is intended to fashion out effective strategies and policies as well as build synergies to support the promotion of rapid inclusive economic growth of the country.

Source: Business Desk/The Publisher