do ngos pay tax in ghana

Although ministries, departments and agencies are required to submit a list of all contracts awarded to consultants to the Internal Revenue Service, it is believed that compliance is low. 80G, 80GGA, 35AC(i& ii) and (i&iii) of the Act. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. These . The church is required to withhold tax of US$250 on payments to the supplier and pay same to the Ghana Revenue Authority. Taxable supplies include sale of anointing oil, bottled water, consultancy services, rental of premises, training, sale of magazines, diaries, calendars, stationery, Bible, and Quran. This write-up, therefore is simply to. Be that as it may, the following are clear. Customs Preventive Officers check the documents, and then release the goods. There are increased calls from the public for regulation of the sector. All rights reserved. This article is written by Amrita Basu, a student of New Law College, Bharati Vidyapeeth (Deemed) University, Pune. One of the most consistently challenging aspects of contracting in Namibia is complying with the country's tax system. The religious organisation must also apply to the CG for the grant of the status of being a religious organisation as a way of serving as check and balances to curtail abuse of the tax exemption process. BECAUSE, THE LABOURERS I WILL ENGAGE THIS WEEK ARE NOT THE SAME LABOURERS I WILL ENGAGE NEXT WEEK. The income of an individual may arise from sources including, i. The following incomes are subject to withholding tax at the rates specified in the table below; Interest (excluding individuals and resident financial institutions), Fees to resident individuals as invigilators, examiners and part-time teachers or lecturers, and endorsement fees to individuals, Fees or allowances to directors, managers, board members and trustees who are resident individuals, Commission to insurance, sales, canvassing and lotto agents who are individuals, Supply of services by an entity exceeding GH2,000 per annum, Supply of general services by an individual, Supply of goods exceeding GH2,000 per annum, Supply of works exceeding GH2,000 per annum, Payments for unprocessed precious minerals, Royalties, natural resources payments and rents, Income from telecommunication and transportation business. Businesses exempted from corporate tax are still required to register their business with the GRA to pay income tax. Are there any tax credit for Solar and are there any tax holidays for investments of over 30 million dollars, Kindly update the monthly and annual income tax rates and the VAT and NHIL as well. The School is not into the business of rental of commercial premises. They are also non-profit organizations. The headquarter of this NGO is in Accra, Ghana. A relief is an allowance given to a resident individual to reduce his or her tax burden. The implication of the above definition was that, for any religious organisation to qualify for exemption, it should not only be described on paper as such, it must also act pari passu. It is for the organisation, simpliciter. Companies limited by guarantee including NGOs are exempted from paying corporate taxes. Where the Commissioner has established that the company or NGO is exempt, then the NGO is exempted from paying corporate taxes. Machinery, apparatus, appliances and parts thereof, designed for use in. Are we condoning contravention of Act 179? v.From the facts, the aggregate cost incurred by the pastor in buying the vehicle, house and shares is US$600,000 [500k+100k]. Religious organisations and their leaders have come under intense scrutiny in recent times from the public as to whether or not their incomes should be subjected to tax. Subsequent to the above, the current practice is that the Church will have to procure Tax Credit Certificate (TCC) from the Ghana Revenue Authority to serve as evidence of payment of provisional taxes by the suppliers or service providers. But the big deal here is that you still have to pay them. Do non-profit/ non-governmental organisations (NGOs) deserve a special tax regime? a. It enforces the provisions of the tax acts and serves as the first arbiter between parties in the event of a dispute. A provisional tax assessment is raised on all businesses yearly, including new business registrations. E Plaza 2 Building, Accra, Ghana, P.O.BOX AN 16859, Accra North Ghana, Accra. My NGO engages in the production and sale of artefacts as a fund raising activity but auditors wants to classify that income as business income subject to tax. The highest income tax rate payable by an individual resident in Ghana is 25%. 10% ceiling of the Gross Total Income applies, Government or any NGO approved local authority , institution or association used for the promotion of family planning, 10% ceiling of the Gross Total Income does not apply. Company registration documents including certificate of incorporation and commencement, form 3&4 and regulations (for companies in the old system) or Certificate of incorporation, form 3 and Constitution (for companies in the new system). NHIL is at a flat rate of 2.5%; GETFund is at a flat rate of 2.5%. Disclaimer of Warranty, About Us : 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. The survey appears to suggest that the scope of personal taxation within the formal private sector may be greater than seems to be commonly recognized. The tax withheld must be filed and payment made by the 15, NGO as a Corporate Shareholder of a Company Limited by Shares, Annual General Meetings for Company Limited by Guarantee, A complete annual returns form from Registrar Generals Department. These are: b. Section 10(1) of Act 179 provides that a Company Limited by Guarantee shall not be incorporated with the object of carrying on business for the purpose of making profits. A deduction shall be disallowed for an expense that is of a capital nature. Some NGOs in Ghana generally work through volunteers and they are funded through free-will donations from people. 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 predefined criteria include being a resident entity of public character that is established for relief of poverty or distress of the public, advancement of education, or provision of general public health, education, water or road construction or maintenance. 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 activities of the entity should not directly or indirectly be to the private benefit of the owner(s) or associates of the owner(s). A summary of the goods and services which are exempt from VAT/NHIL and GETFund include: This classification includes all live animals such as cattle, sheep, goats, swine and poultry, but excludes horses, asses, mules, hinnies and similar exotic animals. . Exempt amounts include: Salary, allowances, facilities, pension and gratuity of the President; Income directly connected to the Government or local authorities' activities; The Non Governmental Organisations Act which is the parent legislation on NGOs in Uganda is itself silent about taxation of NGOs. Failure to withhold taxes is an infringement of the law which exposes the organisation to penalties and interest surcharges. Mining firms thus appear to be more compliant with payroll deduction than other industries that operated in the economy in the nineties. Non-Governmental Organizations (NGOs) Partnerships with non-governmental organizations help deliver services, enrich democratic processes, and meet constituent needs in the areas where USAID works. When the revenue exceeds the expenses of the NGO, it is then that such organization earns profit. This organization is a registered Non Governmental organization. Africa Health Research Organization is situated in PO Box AN6731, Ghana. This is in compliance with Section 124 of Act 896. Notwithstanding the above, there are avenues or vehicles through which religious organisations can engage in profit-making activities without contravening any law. All voluntary or charitable organisation as defined U/S.2(15) of the Act has the liability to pay service tax on the income actually received by them, except for that donation which has been specified to be corpus by the donor in writing. A Guide to Tax Work for NGOs - International Budget Partnership 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. Consumer and industrial products and services. Residents are subject to tax at rates ranging between 0% and 30% on the following annual graduated scale of income: It is the employer's responsibility to file monthly tax returns on behalf of its employees. Regional Coordinating Council, Ministries, Accra, Ghana. d.Taxation of the Business and Investment Income of Religious. Therefore, the applicable withholding tax rate is 3%. No. Therefore it cant be implied from the nature of a charitable or voluntary or religious organization or any such organization that carries out social or economic or developmental programs to reach to those people where even the government cannot reach. Africa energy and utilities - Tax guide 2019. Of government employees, withholding taxes covered about 68% of those who worked in the utilities. Historical Antecedents of Taxation of Religious Organisations in Ghana. The Ministry of Finance and Economic Planning together with the revenue collection agencies recently launched a special revenue mobilization exercise to improve and expedite action on overdue taxes. c.The rental of premises for commercial purpose is considered as rent. Furthermore, it will go a long way to help promote a charity sector geared towards their traditional role of helping the poor and needy whilst building the spiritual life of the people. RUPFA was registered on 27th July 2015 with the number CG172072015 of Registrar General of Ghana under Companies Codes, 1963(Act 179). Please feel free to contact us for your Customs classifications and validation, Copyright Notice The Federal Inland Revenue Service (FIRS) recently issued Information Circular No. What are the other tax obligations of NGOs? The church is required to withhold tax of US$30 on payments to the supplier and pay same to the Ghana Revenue Authority. : DSD/6634. The official fee for registering a company limited by guarantee with the Department of Social Welfare is 1,200 for local NGOs and $1,200 for foreign NGOs who have their branches registered in Ghana. Supply of goods such as books, anointing oil, etc. In the case of Mould v. De Vine, Jiagge S. (as she then was) wrote, There was no alternative remedy available to the applicant. Employees of . Under Section 10(1)(d) of Act 592, it was provided that the income accruing to or derived by an exempt organisation other than income from any business is exempt from income tax. Scholarships for Study in Africa Scholarships for African Students Undergraduate Scholarships African Women Scholarships & Grants Developing Countries Scholarships . The World Bank defines NPO's as "private organizations that pursue activities to relieve suffering, promote the interest of the poor, protect the environment, provide basic social services, or undertake community development.". The CG has issued practice notes to serve as a guide in the implementation of the law in this regard. b. The Income Tax Act, Chapter 340, Section 2(f) provides guidance on the types of economic activities that exempt organizations may engage in without becoming liable for . What is the withholding tax obligation of the Church? The following are important to take note of, one of legal frameworks governing the NGO sector is the Income Tax Act 1997. 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. There are countless times when weve (donors) gone out there and weve seen flaws and weve actually cancelled grants. In practice, these may include. Any excess revenue (surplus) remaining after all the expenditures of a religious organisation in any year has to be retained and applied in the future to the companys purposes. The Registrar of Companies appears not to be enforcing the law. In particular, whilst for an individual there is no filing obligation if there is no taxable income, for an entity (i.e. First, in some cases, it is apparent that although personal income taxes are deducted at source, some employers may not remit the taxes to the state accurately and promptly; aided perhaps by corrupt tax officials. Africa Health Research Organization Ghana is situated in Accra, Ghana. Includes transportation by bus and similar vehicles, train, boat and air. The learned judge also referred to the South African case of Chancellor, Master and Scholars of the University of Oxfordv. Commissioner for Inland Revenue, Republic of South Africa to support his position. This legal status makes it easier for NGOs to operate, as they are not required to pay tax on the funding they receive from government bodies, donors, and other sources. Condition of Use The purchase of T-shirts and clothes are considered as goods. 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. Well, simply put it is because the assumption of an automatic tax free environment for NGOs is mistaken. poor girls are given the chance to attend University. In order to be eligible for SSBI status an organization has to meet all conditions as set by the Dutch tax authorities. Most Not-for-profits / NGOs are not within the tax net of the central government. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Congratulations! Salaries, wages, overtime, leave pay, bonus, and similar employment income. As a result, for tax purposes, any profit generated by Trusts which have ultimate beneficiaries as individuals, exposes their business income to tax. Conditions. any function other than those that the entity is established to operate; and, iii. Kindly update. From time to time, the GRA may initiate a company audit. Some NGOs are local while others are International NGOs. Therefore, the amount due the service provider is US$300. And political interpretation of the exercise only further calls attention to those who are most affected and their aversion to comply with tax laws. As was said by Ms Sophia Akuffo, JSC (as she then was), in the case of Atta Barfour v Tema Development Corporation, it is a basic principle that equity aids the vigilant and not the indolent. Therefore, where the Ghana Revenue Authority continues to sit and watch, and fail to enforce the law, it cannot put blame on the religious fraternity. Accordingly, it is not surprising that it does create a fuss! STEP 3 Complete Company limited by guarantee form 3B. Financial Statement for the year of filling. Speaking in the same interview, the CEO of KankoAssociates, Mary Tobbin Osei supported Mr Nkaws position, as a donor, adding that NGOs are unbending when it comes to accountability. their aim was to provide an umbrella for the physically challenged, destitute, and less privileged youths in Ghana through activities like sports, education, healthcare and the art of helping one another. However, even if these agreements make a commitment to provide beneficial tax treatment, including exemptions, such commitments can only be enforced if they have effect under the relevant tax law (i.e. However, obtaining the charitable status does not amount to income tax exemptions. It maintained the tax exemption status for religious organisations under Section . Who procured it and for what? U/S. c.Provision of services such as training, or consultancy. I say so because, how many of our religious organisations file their annual returns with the Registrar of Companies? The Ministry of Finance and Economic Planning is responsible for overseeing the GRA. LawSikho has created a telegram group for exchanging legal knowledge, referrals and various opportunities. This will help the efforts in bringing sanity in terms of the objects of religious organisations, how they operate, among others. Kasoa, Down-Town, KD 195/9, Accra, Ghana View map. Payroll deduction of those who worked in the financial service industry was about 77%, and only 45% in the manufacturing and transport sectors. 35AC of the Act if an NGO gets registered the central government approves of the scientific research programs/projects to be carried out by such organization. ", 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. The Wikimedia Foundation is ranked as the best NGO worldwide. In Ghana, tax is deducted from an employee's personal income at source through a 'pay-as-you-earn' scheme. Registering a Sole Proprietorship Business in 2023, How Foreign Investors Can Register a Business with the GIPC in 2023, How a Foreigner can Obtain Visa on Arrival to Nigeria 2023, How to Obtain a Ghana Work and Residence Permit in 2023, Nature of Business (Give a brief description of the companys business activities, Personal details of Executive Council Members, secretary and subscribers (nationality, date of birth, occupation, contact, email and residential address), Tax Identification Number of Executive Council Members, Secretary and Subscribers, Personal details of the secretary (Name, Residential Address, Postal Address, Mobile Number and qualification), Purpose of Beneficial Ownership Information (You select Company Registration). So why the fuss about taxation of NGOs? 15 best maternity jeans that are actually comfortable, GRIDCo participates in International Day for Women and Girls in Science programme, Nigerian elections 2023: False claims and viral videos debunked, I smashed Major Mahama with cement block Killer, Come clear on 600k barrels Russian crude oil aboard MT Theseus IES to government, NIA to print more Ghana cards as government clears $100m debt, Tinubu is the best person for the job Buhari hails president-elect, Zamalek president jailed for one month for insulting Al Ahly rival, Accra 2023: Postponed Africa Games confirmed for March 8-23, 2024. Any university/college/institution in the list notified by the Income Tax department or association or institution or public sector company or a local authority or to an association or institution approved by the National Committee carrying out scientific researchOr rural developmental programs, Rural Development Fund or National Urban Poverty Eradication Fund set up and notified by the Central Government. Unlike before, all companies limited by guarantee were excluded from Corporate Taxes and Value Added Tax (VAT). Therefore, where the income is to the benefit of a specific individual, that income is subject to tax unless generally exempt. Generally, NGO salaries are lower than in the private sector. 4. First and foremost, despite the provisions of the tax law, the question that needs answering is: whether or not it is legal for a religious organisation to engage in business for the purpose of making profit for which the tax law envisages taxing same? Do NGOs pay taxes in Uganda? Lack of enforcement by one agency, may have a repelling effect on the other. African Centre for Peace Building, AFCOPB. Ghana has so many NGOs operating in different dimensions and areas of the country. A tax auditor must assess whether the annual income of the pastor is enough to fund the investments he made during the year after allowing for consumption expenditure, other capital expenditure incurred and savings he might have made in the course of the year. Women receive a salary of 260,912 GHS. The questions I seek to address in this contribution are as follows: a. This has come to strengthen my position.Thanks, Jonathan Casely Wiredu (FMVA,MSc,BCom,HND). Tax In Namibia. The Bible says in Luke 11:28, , blessed are those hearing the word of God and keeping it. International Federation of Women Lawyers (FIDA), Ghana, Kantudu Youth For Education And Development (Kayed), Northern Childcare Voluntary Organisation, Northern Sector Action On Awareness Centre (Norsaac), Nsaba Ghana Schools (now located at Nsaba Ghana Community Projects), Oulamii Sooj African Drum & Dance Academy, Pro-Action Network in Education & Skill Training, Poverty Eradication, Youth Empowerment, And Wealth Creation, Regional Advisory Information & Network Systems, Science & Technology Advocacy Renaissance, The Hope Centre Mercy Ministries International, Volta Youth Soccer & Cultural Dancing Academy, Wunnam Northern Development Organisation, helping the less Privileged Children Through Quality Education, www.communityaidinternational.blogspot.com, Youth For Tradition International Exchange, Youth In Advancement In Community Development, Youth Embassy Net Organization (Free the Blind). WELL NOTED. "However, before you are exempted from paying certain taxes, the individual must go to GRA with a. they have been specified in the law, or in any other case, the procedure to enforce such exemption has been followed). | Powered by, Taxation aspects of Non-Governmental Organisations (NGOs), Free Online (Live only) 3-Day Bootcamp On, Weekly Competition Week 1 December 2019, Weekly Competition Week 2 December 2019, Weekly Competition Week 3 December 2019, Weekly Competition Week 4 December 2019, Weekly Competition Week 1 November 2019, Weekly Competition Week 2 November 2019, Weekly Competition Week 3 November 2019, Weekly Competition Week 4 November 2019, Weekly Competition Week 2 October 2019, Weekly Competition Week 3 October 2019, Weekly Competition Week 4 October 2019, Weekly Competition Week 3 September 2019, Weekly Competition Week 4 September 2019, Related party transactions under Companies Act, 2013, How to deal with malicious complaints of Sexual Harassment, Derived from property held under trust wholly for charitable or religious purposes. Green Earth Organisation is situated in Accra, Ghana. publishing, and training); vi. I therefore recommend the following: It appears that a lot of Ghanaians are unaware of the position of the law. STEP 4- Company limited by guarantee constitution form, Name & TIN of members of the Executive Council. The monies used by the pastor must have a source and must fall under one of the categories of income of an individual for which it should be subject to tax unless exempt. An NGO will receive Government Funding, only if registered under section 12A & 80G. Taxable in the same manner as voluntary contributions (without specific direction) as above. This classification should, however, be distinguished from zero-rated supplies. Ultimately any NGO that buries their head in the sand, thinking that tax issues are not a primary concern for them are running a risk. Governing Board, Click on the representative below to chat on WhatsApp or send us an email to info@gra.gov.gh, Copyright 2022, All Right Reserved, Ghana Revenue Authority. Income Tax The principal Though educational institution is excluded from tax-exempt organisation under Act 896, religious institution remains. Lastly, the income that is being exempted should not confer private benefit. Please feel free to contact us for your Customs classifications and validation, Copyright Notice Jesus responded Render unto Caesar the things that are Caesar's, and unto God the things that are God's. (It must be proved and signed by directors of the company at the Annual General Meeting of the company). In addition, certain tax obligations or costs will normally not be exempted - for example, payroll taxes on employees, withholding taxes on suppliers, stamp duty on various legal instruments and indirect taxes on supplies of certain services (for example, telecommunications, electricity). Third, there is a fundamental issue of whether we are sharing the tax burden fairly? the name was changed in 2007 to Sports and Youth Development Organization Ghana. Income Exempt from Tax under the Tax Law, The law does not specifically mention incomes that are attributable to religious organisations which are not subject to tax. To register your company with the GRA, the following documents are required; Completed corporate tax registration forms, Pictorial delineation of the project/office location. The Golden Opportunity Organization Ltd. is situated in Accra, Ghana. In many countries, NGOs are exempt from paying state and federal taxes. Yes, But the salaries which NGOs pay are much lower than the corporate work. For many in the latter category, the life style indicator of the proprietors suggests higher ability to pay. Alcoholic beverages bottled, canned, contained in kegs for sale or packaged in any other form; Non-alcoholic carbonated beverages bottled, canned or packaged in any other form. The poverty rate is estimated to have slightly increased from 25 percent in 2019 to 25.5 percent in 2020. A public trust with an income of atleast 50,000 rupees or less or more than 50,000 needs to file a return to income every financial year.Further, if the voluntary organization in question has not been registered U/S.12A of the Act and earns an income that exceeds the minimum taxable limit then its total income and the corpus fund will be taxable on the amount excess. The supply of educational services at any level by an educational establishment approved by the Minister for Education. NGOs In Ghana: Full List, Functions & Contacts (2022), Traditional marriage in Ghana: All you need to know, The Top 10 Natural Hair Products in Ghana, Orphanages In Ghana : Full List, Locations & Contacts (2022), How to Calculate Electricity Bill in Ghana (2022), Districts in Accra: The Full List + Details, Regions in Ghana & Their Capitals + Other Details, Dentists Salary in Ghana: See What They Earn (2022), Causes of Unemployment in Ghana & Solutions, African Centre for Peace Building, AFCOPB, Centre For Disease Control And Prevention In Africa(CDC AFRICA), Centre for Energy, Environment, and Sustainable Development (CEESD), Centre for Popular Education and Human Rights, Ghana, Coalition of NGOs in water and sanitation, Cradle Of Hope for Relief and Development, Drama Network Serving Society for a Better Tomorrow, Emmanuel Educational Foundation and Sports Academy for the Physically Challenged, Ghana National Deaf Childrens Society (GNDCS), Ghana Rural Action Support Programme (GRASP). Christian Relief Organisation is situated in Nsawam, Ghana.

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