Small Taxpayer Office

The Ghana Revenue Authority (GRA) has modernized all domestic tax procedures for efficient use of resources and also for purposes of providing taxpayer services that meet particular needs of taxpayers in the country. The reform process involves segmentation of domestic taxpayers into Large, Medium, and Small taxpayers based on their annual turnover.

Taxpayers with an annual turnover of GHø5 million are classified as Large Taxpayers. This category also includes specialist industries irrespective of their turnover. There are – upstream and midstream petroleum companies, banking institutions, insurance companies, mining companies and quarries and members of groups of companies where at least one member where at least one member qualifies as a large taxpayer. Taxpayers within the turnover bracket of GHø90,000 up to GH₵5 million are categorized as Medium taxpayers while those with an annual turnover of less than GHø90,000 are classified as small taxpayer.

This new approach to tax administration is based on functional lines rather than the previous tax-type basis of administration. Work process have been developed on functions such as registration, returns processing, debt management and audit which are carried out in a typical domestic tax office.

The Small Taxpayer Office is under the Domestic Tax Revenue Division of GRA which caters for small and micro enterprises or taxpayers below the turnover bracket of GHø90,000. STOs are therefore a One-Stop-Shop where all domestic tax transactions for taxpayers within this tax bracket can be carried out. Special attention will be focused on the needs and requirements of small taxpayers in an STO.

Purpose of the STOs

  • To provide sufficient attention to the needs of small taxpayers.
  • To administer taxes along functional lines which would allow for specialization and professionalization of workforce. In other words, staff develop capacity to understand and manage the peculiar needs of the small taxpayer.
  • Better and improved efficiency and productivity as resources are better utilized and deployed. It also leads to improved delivery of services for small taxpayer.
  • Simplified payment system and returns processing arrangements to minimize compliance costs to small taxpayer.

SERVICES STOs OFFER

STOs are established to be a one-stop-shop and customer-friendly tax offices for small taxpayers. That is a single, comprehensive approach to taxpayer services that provides all necessary information and support to meet a taxpayer’s needs in one place. The one-stop-shop enables a taxpayer to register for all current tax obligations, and receive one Taxpayer Identification Number (TIN) for all tax administration purposes. Taxpayers will obtain tax clearance certificates and other relevant documents from the respective STOs. For instance, they can pay all their domestic taxes (either direct or indirect) at STO. e.g PAYE, Corporate Income Tax,VAT/NHIL, Excise duty etc.

STOs have three main functional units namely the Taxpayer Services, Debt Management, Compliance and Enforcement as well as Audit.

The Taxpayer Services Unit: Takes care of all front-line services to taxpayers such as registrations/de-registrations, returns processing and payments, tax education, enquiries/complaints.

The Compliance, Enforcement and Debt Management Unit: Is responsible for back end services to taxpayers such as monitoring the debts of taxpayers, ensuring compliance with returns filing and payment, identifying non-filers and late filers and enforcing payments of tax arrears.

The Audit Unit: This unit’s function is to improve taxpayer compliance through effective risk-based audit programmes through field and desk audits and assessments.

OBLIGATIONS & STRUCTURE OF STOs

Small Taxpayers are presumed to be enterprises and businesses who operate informally and generally do not keep adequate business records. All taxpayers classified under STO are required to meet their responsibilities under the law which include:

  • Maintenance of good records
  • Submission of returns by the due dates
  • Payment of all taxes due
  • Making records available for examination
  • Informing his/her STO of material change in business

To enable small and micro businesses to be tax compliant, taxes such as the Vehicle Income Tax (VIT) the VAT Flat Rate Scheme (VFRS) and the Tax Stamp were introduced.

Vehicle Income Tax – The VIT is collected from commercial vehicle operators on quarterly basis and has these benefits:

  • The VIT system makes it obligatory for commercial vehicle operators to buy VIT stickers from any STO on a quarterly basis
  • These stickers are in various categories ad rates depending on the vehicle’s passenger capacity and type of operation e.g taxis, trotros, tour buses, etc
  • The sticker must be pasted on the front windscreen
  • Monitoring is done with the assistance of the Ghana Police Service

Tax Stamp – This is a tax collected from small scale self-employed persons in the informal sector on quarterly basis. Under the Tax Stamp system, business operators in the informal sector are grouped according to business type e.g dressmakers, susu collectors, chop bar owners, butchers etc. The business types are further grouped by class/size to arrive at equitable rates to be paid according to both type and size.

VAT Flat Rate Scheme (VFRS) – This is a special method for collecting and accounting for VAT/NHIL which is designed for businesses operating in the retail and wholesale sector. Under the VFRS, VAT registered businesses dealing in taxable goods charge VAT/NHIL at a marginal rate of 3% on the value of each taxable item sold.

  • WHAT IS THE STRUCTURE OF THE STO?

The typical STO is headed by a Chief Revenue Officer and assisted by Principal Revenue Officers who are in charge of the Audit, Debt Management, Compliance and Enforcement Unit and then Taxpayer Services.

7. WHAT BENEFITS WOULD TAXPAYERS DERIVE FROM STOs?

Taxpayers would benefit from the improved function-based structure and processes put in place at the STOs. Some of these are:

  • Improved Service Delivery
  • Reduced tax compliance costs
  • Improved business processes backed by ICT
  • Better customer service delivery
  • A common source for tax procedures
  • A single source for tax inquiries
  • Improved Quality of Customer Records