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Tax Offences and Penalties

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GRADomestic TaxTax Offences and Penalties

Penalties and Offences

The Income Tax Act 2015 (Act 896) as amended stipulated activities and actions that are considered tax offences and their associated consequences in terms of interest, penalties, fines and/or prosecution to the offender of that act.

There are two categories of penalties

  • Offences which attract pecuniary penalties: These types of offences are mainly administrative powers given to the Commissioner General to impose monetary fines as a result of failure to comply with the tax law. The pecuniary penalties are in addition to the original tax liability and they do not relief a person from criminal proceedings in court.
  • Offences which attract imprisonments or both imprisonment and pecuniary penalties: The taxpayer can still be criminally prosecuted depending on the circumstances. This in addition to the monetary fines are mostly imposed by the court.

The penalty regime in Ghana is predominately based on the degree of culpability of the taxpayer towards his tax obligations. The degree of culpability ranges from deliberate attempt to reduce tax liability to careless preparation of tax returns and records keeping. Taxpayers are therefore supposed to exercise care when calculating their taxes and filling tax returns.

Tax Offences and their related Penalties include:

Offence Penalty
Failing to maintain proper documents
  • The offender will pay 75% of the tax attributable to that period where the failure is deliberate.
  • In any other case, the lesser of the amount referred to in the above and two hundred and fifty currency points.
Failing to file tax return A person would pay 500 currency points and a further penalty of 10 currency points for each day that the failure continues.
Failing to file Communications Service Tax Payment of 2000 currency points and a further penalty of 500 currency points for each day that the failure continues
Failure to submit the tax return four months after the imposition of the penalty for non-submission The Commissioner- General may, in addition to the penalty imposed, prosecute the person to compel the person to submit the return.

A person who

  • makes a statement that is false or misleading in a material particular to a tax officer; or
  • omits from a statement made to a tax officer, any matter or thing without which the statement is misleading in a material particular, commits an offence.
  • Payment of 100% of the tax shortfall where the statement was made without reasonable excuse; or
  • 30% of the tax shortfall in any other case
  • where, if the inaccuracy of the statement were undetected, it may have resulted in an underpayment of tax in an amount exceeding 50 currency points, to a fine of not less than 25 penalty units and not more than 200 penalty units, or to a term of imprisonment of not less than three months and not more than two years or to both;
  • In any other case, to a fine of not less than five (5) penalty units and not more than 50 penalty units or to a term of imprisonment of not less than one month and not more than three months or to both.
Unauthorised attempt to collect tax
  • where the collection or attempt is made knowingly or recklessly, 200% of the amount collected or attempted to be collected; or
  • In any other case, the amount collected or attempted to be collected
Aiding and abetting- A person who knowingly or without reasonable excuse aids, abets, counsels or induces another person to commit an offence
  • Shall pay 100% of the tax shortfall
  • The tax shortfall means the underpayment of tax
Failing to comply with a tax law
  • Where a specific penalty is not provided, is liable on summary conviction to a fine of not less than 1000 penalty units and not more than 2500 penalty units or
  • To a term of imprisonment of not less than two years and not more than five years or to both.
Failing to register
  • A person who commits such offence is liable on summary conviction to;
  • pay the tax payable under that tax law; and
  • pay a fine of not more than two times the amount of tax payable or an amount of 1000 penalty units, which- ever is higher
  • The Commissioner-General may authorize the forfeiture of any goods or materials used by the person in carrying on the business of that person.
Failing to pay tax by due dates
  • The person is liable on summary conviction-
  • where the failure relates to an amount exceeding 2000 currency points, to a fine of not less than 200 penalty units and not more than 1000 penalty units or to a term of imprisonment of not less than three months and not more than one year or to both; and
  • in any other case, to a fine of not less than 50 penalty units and not more than 100 penalty units or to a term of imprisonment of not less than one month and not more than three months or both
Impeding tax administration of a tax law
  • where the offence involves fraud or undue force, to a fine of twice the amount sought to be evaded or recovered or 200 penalty units, whichever is greater, or to a term of imprisonment of not less than two years and not more than four years or to both; and
  • In any other case, to a fine of not less than ten (10) penalty units and not more than 200 penalty units or to a term of imprisonment of not less than three months and not more than two years or to both
  • In addition to the punishment specified above any goods used by the offender in the commission of the offence shall be forfeited
Causing harm to a tax officer;
A person who shoots at, maims, wounds or causes harm to a tax officer acting in the execution of the duty of the tax officer commits an offence.
The offender is liable on conviction to a term of imprisonment of not more than twenty years

Note:

“Penalty unit” refers to such units established by the Fines (Penalty Units) Act 2000 (Act 572). The monetary value of a penalty unit stands at GH¢12.00.

“Currency points” as referred to in the Income Tax Act, 2015 (Act 896). The monetary value of a currency point stands at GH¢ 1.00.

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