Landlords, landladies must pay rent tax — GRA Boss intensifies public awareness

The Administrator of the Ghana Revenue Authority (GRA) at Agona Swedru, Mr. Kelvin P. Krosah, has disclosed that his office is intensifying public education and sensitisation campaigns to help achieve its revenue target.

According to him, while many people are honouring their tax obligations and filing returns, others continue to neglect certain taxes, particularly the rent tax.

"Rent tax as in the tax law means that when a landlord or landlady rent a room to a tenant, they have to pay rent tax to GRA for the profit made from renting the building.

"Additionally if a landlord or landlady rent a building to a company or institution, the law says he or she must pay rent tax to GRA," Mr. Krosah explained.

He said the GRA had stepped up education on rent tax because many landlords deliberately refuse to comply. "Our major challenge is that people think the Rent tax is the same as property rate being collected by Metropolitan, Municipal and District Assemblies, so once they pay for property rate that's all.

"On the contrary, the law states clearly that if you own a building and rent it to tenants, the owner of the house must pay rent tax because the landlord or landlady is making profit from the building," he clarified.

Mr. Krosah further explained that if a building is used solely as a family home and not rented out, the owner is not liable to pay rent tax.

Giving details of the tax, he revealed that 5% of the rent collected from tenants is charged as rent tax, while renting to companies or institutions attracts a 15% tax on each transaction. He stressed that landlords and landladies are obligated to remit such taxes to the government through the GRA, warning that failure to comply attracts penalties.

Mr. Krosah also hinted that some defaulting landlords will soon be prosecuted. "Some tax defaulters would soon be put before the law court to face consequences of failing to honour tax obligation which may led to jail sentences," he stated.