Articles of incorporation from the country of origin (if it is an external company). ", Every person in Ghana (other than an individual who is not into business) is required to withhold tax on payments to resident and non-resident persons for the supply of goods, works and services unless exempt. b. Antoa) and the like on all fours. Donation to religious organisations creates a 360 degree benefit for individuals. conferring a private benefit on any person other than a benefit that is in pursuit of a function for which the entity is established, Act 896 does not define public nature. Whether you're a contractor or a permanent employee, you have to pay tax on all of your earnings whilst you're in the country. PricewaterhouseCoopers 2008 Tax Facts and Figures 1 Income liable to tax Income tax is levied in each year of assessment on the total income of both resident and non-resident persons in Ghana. It is the employer's responsibility to file monthly tax returns on behalf of its employees. The stamp is affixed on specified excisable goods in Ghana whether locally manufactured or imported. Policymakers regularly review and propose . What is the procedure for compulsory registration of a permanent establishment business in Ghana? What are the other tax obligations of NGOs? This exemption does not apply to certain special industries; Interest or dividend on an investment paid or credited to a holder or member of an approved unit trust scheme or mutual fund; Interest and gains realised by a non-resident person on bonds issued by the government of Ghana; Gains from the realisation of GSE- listed securities; Income of an approved unit trust or mutual fund; and. The School is not into the business of rental of commercial premises. All rights reserved. To achieve the intended purposes, NGOs require funding and normally this is in the form of contributions and grants that have been derived from other profit-making activities, that would have been taxed already. This organization is a registered Non Governmental organization. However, NGOs make efforts to pay fair wages to their workers. Tax benefits. In the year 2001, the Internal Revenue Act, 2000, Act 592, was enacted and came into force on 16 February 2001. Of government employees, withholding taxes covered about 68% of those who worked in the utilities. Misconception #1 - Understanding of the term 'Charitable activities'. publishing, and training); vi. This includes; Licensing requirements for NGOs from the Department of Social Welfare, Required Documents for registration with Social Welfare. But this is a general mis-conception that we tend to have because of the truth of it being a non-profit organisation. Again, your answer is as good as mine. The country director shared that working in an NGO comes with a lot of accountability and audits. NGOs might focus on activities in areas involving health or health emergencies, education, infrastructure, advocacy of minority rights, support of the poor, and the reduction of crime. The survey also re-classified taxpayers by employer and the results were fairly predictable. Ordinary meaning can, therefore, be given to the stream of income attributable to religious organisations that are exempt from tax. At a glance, it may appear a lot of our religious organisations whose activities fall within the above-mentioned conditions for VAT registration may not have registered with the Ghana Revenue Authority. If you are an established business operating in Ghana, one of your key obligations is to pay your taxes. He is required by Article 23 of the Constitution 1992 to comply with the requirements imposed on him by Section 1(1) of Act 915 to administer and give effect to the tax laws of Ghana. b. That is to say, wherever the income is earned, however the monies/benefits are paid, it is subject to tax in Ghana insofar as the person earning the income is resident in Ghana unless exempt. they have been specified in the law, or in any other case, the procedure to enforce such exemption has been followed). Some NGOs are local while others are International NGOs. Twelve companies owed nearly 12.3 billion cedis, nearly enough to finance the administrative expenses of the Ministry of Justice in fiscal year 2006. In the said case, the court held that the person whose liability to tax was being assessed was thus Oxford University, which the court held to be indubitably an educational institution of a public character. This exclusion was removed in the Finance Act 2007 - and whilst arguably, one could still seek to rely on common law principles to insist on the need for a profit motive, it appears that this change was seeking to make such a motive unnecessary. Calculating taxes can be tedious, even more so if you are not sure about the rates and percentages. An NGO doesn't have to pay tax just by . Consequent upon the above, it is advisable for the CG as part of assessing religious organisations to tax to determine the vehicle of operation of the religious organisation to form the basis of how to approach and determine the assessment. This article details everything you need to know about tax registration, tax rates, tax incentives, withholding taxes, income taxes, monthly tax filings, and audits in Ghana. Hips Charity Organisation Education is situated in Accra, Ghana. Osu Badu Street Dzorwulu. provision of services (such as hiring out of venues and facilities of the religious organisation); v.selling of in-house expertise to interested persons (e.g. Application letter on the organizations official letterhead, Memorandum of understanding between the NGO and the Government. That dictum, of course, leaves open the debate on whether taxes are too high or too low relative to the protection and services that one derives from the state. partnership, trust or corporation) this obligation applies whether or not there is taxable income. It must be pointed out that educational institutions and religious institutions under enactments in Ghana prior to the year 2016 were considered as exempt organisations for tax purposes. The withheld tax must be paid to the Ghana Revenue Authority within 15 days following the month to which the payment relates. As a result, the exemption from tax of the income of a religious organisation is not applicable to the individuals. The Golden Opportunity Organization Ltd. is situated in Accra, Ghana. WHAT HAPPENS TO THE PROFIT EARNED BY THE NGO? Our government agencies must be up and doing to ensure compliance with the laws of Ghana by all. Machinery, apparatus, appliances and parts thereof, designed for use in. Renovation of the church painting, repairs and related construction activities etc. Therefore, a religious organisation registered as such with the Registrar of Companies is separate from the founder(s), religious leaders, or employees of the company. c.The rental of premises for commercial purpose is considered as rent. Accordingly whoever is found guilty under the Act, shall be punishable with an imprisonment for a term that shall not be less than three years but may extend to seven years and fine which may extend upto five lakh rupees. STEP 4- Company limited by guarantee constitution form, Name & TIN of members of the Executive Council. For domestic transactions, examples include, works (5%); goods (3%); services (7.5%); etc. With respect to resident persons, the income must be derived from, accrued in, brought into or received in Ghana. As noted earlier, the degree of compliance varied greatly in the private sector. These are: b. (It must be proved and signed by directors of the company at the Annual General Meeting of the company). In many countries, NGOs are exempt from paying state and federal taxes. Do note that whilst it's branded as Ghana.GOV, the actual url is ghana.gov.gh. The normal response will be Of course!. An expense is deductible if it is wholly, exclusively and necessarily incurred by the person in the production of the business or investment income for the year. Therefore, once the threshold for registration is met or expected to be met, it becomes mandatory for the registration to be done within 30 days. A provisional tax assessment is raised on all businesses yearly, including new business registrations. For tax purposes, a company is a separate and distinct entity from its employees and affiliates. One of the grievous misconceptions in the sector is the common assumption that all the charitable activities carried out by an NGO are exempt from GST. First, personal income tax compliance is unevenly enforced across different sectors of the economy and by occupations. Youthful Life Improvement Organisation is situated in Tamale, Ghana. In Matthew 22:21, Jesus was asked by the Pharisees whether it is lawful to pay taxes to the emperor, or not. Redempta Maira is a Senior Manager, Tax Services at PwC. The more senior the job within the NGO, the higher the wages will be. Well, simply put it is because the assumption of an automatic tax free environment for NGOs is mistaken. It provided as follows: there shall be exempted from tax the income of an ecclesiastical, charitable of a public character insofar as such income is not derived from trade or business carried on by such institution [Emphasis mine]. Should you have any comments, you may send it by email, kwasi.nyantakyi.owiredu@gmail.com. Africa Health Research Organization Ghana is situated in Accra, Ghana. Find Individual Donors List; List of 3500+ Donors and Foundations Supporting Individuals Worldwide! You can click on this link and join: https://t.me/joinchat/J_0YrBa4IBSHdpuTfQO_sA. Address description of the subscriber. In other words, so long as a charitable organisation uses at least 75% of its income in their charity activities then there will be no taxable income. Jesus responded Render unto Caesar the things that are Caesar's, and unto God the things that are God's. After you are registered as an NGO, you can apply for tax exemption through your country's revenue agency. The rate for the withholding of the taxes depends upon the nature of transaction and residency of the supplier. : DSD/6634. Payroll deduction of those who worked in the financial service industry was about 77%, and only 45% in the manufacturing and transport sectors. Employees of . In practice, these may include. Providential Aid Organization is situated in Kumasi, Ghana. Partners in Health, Oxfam, BRAC, International Rescue Committee, PATH, CARE International, Mdecins Sans Frontires, Danish Refugee Council and Ushahidi make up the top ten. Penalty for late filing of tax returns are. Who or that is and functions as a religious organisation of a public character ; b. No. The activities of IOM Ghana focus mainly on assisted migration and development, migration health services, voluntary return and reintegration, cultural orientation, counter-trafficking, emergency assistance, and resettlement. A church intends having its 20th Anniversary and the Planning Committee has outlined the following programme of expenditure and the costs are payable in the month of August 2018: a. RUPFA was registered on 27th July 2015 with the number CG172072015 of Registrar General of Ghana under Companies Codes, 1963(Act 179). Lifeline Charity Organisation is situated in CPK 176/1 Walantu, Ghana. LAASFUND was established in 2015. This exemption excludes professional services such as architectural or surveying (i.e. The resources and income generated by the entity should not be assigned to, or distributed among the owner(s) or their associates. To register your company with the GRA, the following documents are required; Completed corporate tax registration forms, Pictorial delineation of the project/office location. 2. Many nonprofit organisations are taxable, but may be entitled to special rules for calculating taxable income, lodging income tax returns and special rates of tax - see 'Income tax exemption' on page 10. Some tax laws are complex, not easily understood. However, a religious organisation registered as a Trust (with individuals as ultimate beneficiaries), for example, the business profit shall be subject to tax. Initially it was exactly the scenario but with increase in unscrupulous practices these NGOs were made liable to pay tax and also allowed exemption. Considering the enormous powers of the CG, if he fails to enforce the law, who should we blame? "However, before you are exempted from paying certain taxes, the individual must go to GRA with a. This definition limited tax exemption to the Christian Church with regards to their income other than derived from business. Hence, you should know the various taxes to pay and the rates. PAYE is computed with the personal income tax rates. It maintained the tax exemption status for religious organisations under Section 3(1)(d) of the law. NGOs play a pivotal role in our society. It is for the organisation, simpliciter. That is to say, where business is carried out incidental to its purpose as a religious organisation Limited by Guarantee, or Trust (with no ultimate private benefit to individuals), the profit is exempt from tax, simpliciter. These exemptions are to be outlined during filing. v.From the facts, the aggregate cost incurred by the pastor in buying the vehicle, house and shares is US$600,000 [500k+100k]. Are religious leaders or founders, and employees of religious organisations required to pay taxes and/or comply with the tax laws of Ghana? Exempt amounts include: Salary, allowances, facilities, pension and gratuity of the President; Income directly connected to the Government or local authorities' activities; Gifts derived in course of employment, business and investment; Now, where a religious leader acquires property or makes investment in his own name, the question that must be asked is; what is the source of income of the person? The employment income of the pastor is US$8,333.33 per month. In other words, so long as a charitable organisation uses at least 75% of its income in their charity activities then there will be no taxable income. The Ministry of Corporate Affairs brought a uniform accounting and reporting framework for NGOs. : 2021/01 ("the Circular") providing guidelines on the taxation of incomes of Non-Governmental Organisations (NGOs) and other statutory obligations on their operations and activities.This is pursuant to the relevant provisions of the Companies Income Tax (CIT) Act Cap. b. Corporate tax is the tax imposed on the net income of the company, in other words, it is a levy placed on the profit of a firm to raise taxes. Most Not-for-profits / NGOs are not within the tax net of the central government. In an interview, Ms Chisanga said Zambia is losing huge. What makes tax evasion by persons and businesses possible is that it is difficult to track through payroll records, most often inadequately kept, and it is difficult to assess profits from proprietary businesses. Some NGOs are local while others are International NGOs. But the big deal here is that you still have to pay them. the name was changed in 2007 to Sports and Youth Development Organization Ghana. they are socially, politically, economically educationally and even morally helpful to the country. Second, the tax collection drive has revealed that tax delinquent businesses include church run businesses, stevedoring companies, foreign exchange bureaus, restaurants, hotels, and shipping yard companies, all of which are service providers in one form or the other, and, most likely, owned by people with distinguished lifestyles. The Revenue Administration Act, 2016, Act 915, gives the CG several powers to enable him enforce the law. In Ghana, tax is deducted from an employee's personal income at source through a 'pay-as-you-earn' scheme. The 1947 Ordinance outlined the first provision of exemption from tax by charitable organisations including religious organisations. STEP 2- Apply for a Tax Payer Identification Number (TIN). You must send a letter to the Comptroller of Customs that indicates the type of activity that your organisation is engaged in, that the efforts of the organisation are non-profit, and how the duty relief would benefit the wider public. NHIL is at a flat rate of 2.5%; GETFund is at a flat rate of 2.5%. The payment of the withheld tax and filing of the withholding tax return must be done by 15 September 2018. e.The photography services constitutes services. Ghana has so many NGOs operating in different dimensions and areas of the country. An honorarium is considered employment income for income tax purposes and is therefore subject to deductions. Average salary in Ghana is 306,223 GHS per year. Firstly, in terms of common law for a person to be seen as carrying on a business, it is generally understood that there must be a profit motive - and indeed, this approach was also previously reflected in the income tax legislation, which prior to July 2017 explicitly defined the term business to exclude activities that are conducted without a profit motive. NGO Audit. 5. No mention was made of other religious organisations. There are increased calls from the public for regulation of the sector. If you enter only ghana.gov in your browser, you won't find the website. iii. A deduction to the extent of 100% of the contribution made if it has been made to the following: a) The National Defence Fund or the Prime Ministers National Relief Fund, b) The Prime Ministers Armenia Earthquake Relief Fund, c) The Africa (Public Contribution-India) Fund, d) The National Foundation for Communal Harmony, e) The Chief Ministers Earthquake Relief Fund, Maharashtra, f) The National Blood Transfusion Council, k) The Andhra Pradesh Chief Ministers Cyclone Relief Fund, 1996, m) The Chief Ministers Relief Fund or Lieutenant Governors Relief Fund, in respect of any State or Union Territory, as the case may be, subject to certain conditions, n) The University or educational institution of national eminence approved by the prescribed authority, o) The National Sports Fund to be set up by the Central Government, p) The National Cultural Fund set up by the Central Government, q) The Fund for Technology Development and Application set up by the Central Government, r) The national trust for welfare of persons with autism, mental retardation, cerebral palsy and multiple disabilities. 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