An honorarium is considered employment income for income tax purposes and is therefore subject to deductions. Partners in Health, Oxfam, BRAC, International Rescue Committee, PATH, CARE International, Mdecins Sans Frontires, Danish Refugee Council and Ushahidi make up the top ten. With reference to the holding of the Chapel Hill School Limited (Supra) case, and considering the present state of all applicable laws, the income of a religious organisation established as a Company Limited by Guarantee or a Trust (with no individuals ultimately being the beneficiaries) in the performance of its objects, the business profit is not subject to tax in Ghana. And in the advanced economies they are called Charities. 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. However, the practice notes issued by the CG regards activities of a religious organisation to be of public nature where, by its activities and operations, it, i.is open or accessible to the general public or a section of the public; and. Further the profits earned by any charitable trust from a construction project cannot be subjected to exemption u/s.11 but be entitled to deduction u/s.80IB(10). The evidence is scanty. The Wikimedia Foundation is ranked as the best NGO worldwide. Sections 97(3)&(4) of Act 896 makes the income of a religious organisation exempt from tax except income attributable to business. In explaining what constitutes public character, the learned judge said business was of public character did not confer any private benefit to individuals. He further said that, for as long as the appellant was a Company Limited by Guarantee, there was a legal assurance that its business was not conferring any private benefit on individuals. The court concluded that an education institution of a public character is not subject to income tax during the said period it remained as a Company Limited by Guarantee until such time that it converted into a Company Limited by Shares. Section 10(2) of Act 179 goes on to provide for sanction for officers, members of the company and the company itself should it carry out activities for the purpose of making profit. A deduction to the extent of 50% of the contribution can be made if so has been made to either of the following: b) The Prime Ministers Drought Relief Fund. Tax and duty can be waived on goods imported for a charitable purpose, or for use in a not-for-profit enterprise. A resident of India having a taxable income and a non-resident having an Indian passport can claim for benefits if they have made a donation to an NGO which is registered with the Income Tax Department and holds tax exemption status u/s. Any NGO, fund or institution established in India for a charitable purpose and fulfils the conditions laid down u/s.80G. Articles designed exclusively for use by the disabled. The purpose of the law with regards to the activities of religious organisations is to, among others, specifically empower the CG to approve an entity as a religious organisation, revoke the approval for a good cause or in contravention of the requirement of the law. Instead, when the NGO has met the predefined criteria and has a ruling to be recognised as a charitable organisation, then it will be granted an additional tax deduction equal to 25% of its income. Adjacent. After all taxes are compulsory payments and the individual measure of gains cannot be a sensible rule to go by in deciding whether or not to comply with the law. Income Tax Exemptions are the amounts that are reduced or removed from Income amounts because they are exempt from taxation. 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. Non-residents are liable to Ghanaian income tax on any income derived in Ghana from any trade, business, profession, or vocation, or which is derived from an employment exercised in Ghana. Financial Statement for the year of filling. Your answer is as good as mine. 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. My contribution is directed towards the Commissioner-General (CG) and his officials, the Government of Ghana, Tax Professionals and Students, and the Academia in our attempt to educate the religious fraternity, and the general public, in particular, the ordinary man in madina trotro. In terms of donor funding, in the current world that we are in, every penny of the donor must be accounted for. The NGOs who generate their own income it will be pay good salary to their employers. same must be subjected to withholding taxes. Prevailing view in some circles is highly critical of such exercises as politically motivated. See you there. Brochure or publication about your organization. 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. 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. The accounts of religious organisations must, among others, capture all receipts and payments for each year, and a statement of financial position of the company or trust, as the case may be. Generally, NGO salaries are lower than in the private sector. This is because shares confers beneficial interest in a company to only identifiable members. Form 3A must be witnessed by Commissioner for Oaths/Notary Public/Self-Declared. Justice Oliver Wendal Holmes (US Supreme Court 1841-1935), once said that taxes are the price we pay for a civilized society. The most typical earning is 85,745 GHS. Please feel free to contact us for your Customs classifications and validation, Copyright Notice As well as paying tax in Namibia, you might also still be eligible to pay some . There are two interpretations to this finding. Payroll deduction of those who worked in the financial service industry was about 77%, and only 45% in the manufacturing and transport sectors. 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. Therefore, where the income is to the benefit of a specific individual, that income is subject to tax unless generally exempt. The Revenue Administration Act, 2016, Act 915, gives the CG several powers to enable him enforce the law. Importer or agent pays fees and obtains a vehicle toll pass and a waybill from Ghana Ports and Harbors Authority (GPHA). g.Investigation of non-compliance with charity rules; h.Establishment of charity courts; and, i. 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. If the business concerned is one that falls within the purview of the educational business carried out by an educational institution of a public character, then the income from that business will qualify for exemption from tax.. Where such is the case, it is quite worrisome, and it requires immediate action. Historical Antecedents of Taxation of Religious Organisations in Ghana. The Ministry of Finance and Economic Planning is responsible for overseeing the GRA. Third, because the tax burden is borne by the few, it is to be expected that the actual rates may be high in order to raise any needed revenue and a higher rate itself discourages compliance. The government in 2001 initiated measures to rope into the tax net private consultants, lawyers and those in professional practice some of whom were not paying taxes on their income. With the above settled, the next question of interest is: what are the sources of income of the pastor that enabled him to buy the vehicles, house and shares? Careers Purchase of anniversary T-Shirts and Clothes; US$1,000, c. Rental of the premises of a near-by School which has bigger space for reception after the programme; US$2,000, d. Catering - caterer to provide food and drinks for the programme; US$1,000; and. As highlighted, taxation of the NGO sector is much more complicated than many initially assume. Calculating taxes can be tedious, even more so if you are not sure about the rates and percentages. 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. Companies limited by guarantee including NGOs are exempted from paying corporate taxes. The following are important to take note of, one of legal frameworks governing the NGO sector is the Income Tax Act 1997. Taxes for Companies Limited by Guarantee in Ghana. The fact that the activities of Oxford University Press South Africa appeared commercial did not deprive Oxford University of its exemption from tax in respect of the proceeds from the business from South Africa What was important was that the income derived by Oxford University from its business in South Africa was fed into its educational purposes and was not for the private gain of individuals.. Green Earth Organisation is situated in Accra, Ghana. Lack of enforcement by one agency, may have a repelling effect on the other. Hse. Exempt amounts include: Salary, allowances, facilities, pension and gratuity of the President; Income directly connected to the Government or local authorities' activities; List of Grant Funding for Individuals & Grants for NGOs. As noted earlier, the degree of compliance varied greatly in the private sector. Ghana Life Savers Organization is situated in Tema, Ghana. In Ghana, tax is deducted from an employee's personal income at source through a 'pay-as-you-earn' scheme. Rational Choice Theory Examples In Movies, Everfi Ignition Program, Mature Paperbark Maple For Sale, Ethiopia Yirgacheffe Starbucks, Publix Emerald Isle, Passion For Learning, Cheapest Stolichnaya Vodka, . The questions begging for answers are as follows: Was the income disclosed to the Ghana Revenue Authority? This will help the efforts in bringing sanity in terms of the objects of religious organisations, how they operate, among others. 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. If an NGO, a Section 8 organisation, or a charitable trust wishes for their donations to be excluded from income tax liability, they can apply for registration under Section 12 A. A deduction shall be disallowed for an expense that is of a capital nature. Firstly, whilst it is true that in certain cases NGOs will have relief from income tax on the NGO entity itself, and from certain indirect taxes, any such relief is normally subject to conditions. 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 commitment to paying taxes is low. It is actually the opposite. 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. Finally, the urgency of the exercise drives home the need to increase domestic revenue mobilization in order to be less dependent on external resources for development. First, personal income tax compliance is unevenly enforced across different sectors of the economy and by occupations. The organization is working in Associations business activities. Obviously, the employment income of the pastor of US$100,000 and gift of US$50,000 couldnt have been enough to enable him make the kind of expenditure he made during the year. The highest rate is presently 35%. https://www.myjoyonline.com/notion-that-people-set-up-ngos-to-enrich-themselves-false-stakeholder/-------https://www.myjoyonline.com/notion-that-people-set-up-ngos-to-enrich-themselves-false-stakeholder/, Daily: 0.30p | Weekly: GHS 2 | Monthly: GHs 9, Fake NGOs colluding with funding organisations for leaked funds AAG Country Director, African farmers, NGOs, faith leaders to demand end to failed Green Revolution, B-HECK Africa NGOs Alliance to honour Juabenhene, others for contribution to local governance, development, Budding entrepreneurs advised to steadily nurture their businesses, NGOs, CSOs join All-Africa Students Union against child labour, Gender-based violence, harassment at workplaces widespread in informal sector Survey, GES policy draft weakens civil societys ability to demand accountability CSOs, Nutrition and post-harvest losses sub-committee inaugurated in East Gonja, LIVE: Nigeria election 2023: Latest presidential and parliamentary results, We are not backing down unless there is force majeure Deputy EC chairman on CI, Ada Traditional Council calls on government to honour Atsu with monument, Ghana Card wont be used to vote in 2024 election Jean Mensa, Playback:Jean Mensa, Attafuah brief Parliament over controversial CI proposal, 2022 FIFA Awards: Real Madrids David Alaba racially abused after voting for Messi ahead of Benzema, Kwaku Agyeman Manu given 2 hours to appear before Health Committee over vaccines shortage, The Best Awards: I dont decide alone David Alaba explains voting Messi ahead of Benzema, Bola Tinubu wins Nigerias presidential election against Atiku Abubakar and Peter Obi, Ghana Police media blackout: How a nationwide veto is feeding speculation and disinformation, The 10 Youth Resource Centres that have become Bush Resource Centres, Ghana Month: Prime Minister Nkrumahs review of Ghana a year after Independence, Ghana Month 2023: Joy FM promises listeners top-class Ghanaian content, Gender gap in access to finance widened to 11% in 2021; BoG committed to closing it, Approval of new Ministers likely to be subjected to secret ballot. NGOs are required to charge VAT on all taxable goods and services supplied and remit same to the FIRS as at when due. The writer is a Chartered Tax Practitioner, a Chartered Accountant, a Postgraduate of University of East London, a Graduate of University of Ghana (Business School) and a Student of Law. The expenses in the Profit and Loss statement must be traced to the cash book, with supported payment receipts accordingly, The salaries and wages figure in the Profit and Loss tally with the PAYE filings. And, any corresponding expenditure must relate to the purpose for which it was set up and approved by the CG. If you are an established business operating in Ghana, one of your key obligations is to pay your taxes. It maintained the tax exemption status for religious organisations under Section . Where is the Russian oil stashed in Ghana? In Chapel Hill School Limited v the Attorney-General and the Commissioner, Internal Revenue Service, [2009, Unreported] Dr. Date-Bah JSC (as he then was), said Our comment on this argument by the Second Respondent (Commissioner, Internal Revenue Service) would be that the mere fact that what the Appellant does constitutes a business does not inevitably lead to the conclusion that the activity cannot be exempt from tax. NHIL is at a flat rate of 2.5%; GETFund is at a flat rate of 2.5%. The Bible says in Luke 11:28, , blessed are those hearing the word of God and keeping it. iv. Youth World Travel Organization (YWTO) is situated in Ghana. He added that NGOs also pay taxes and are checked by the Ghana Revenue Authority (GRA). 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. 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