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19.11.2008 Business & Finance

Exempt large Taxpayers From Withholding Tax

> Exempt large Taxpayers From Withholding Tax

The private sector has urged the government to exempt all large taxpayers from paying the five per cent withholding tax.

At a forum to make their inputs to the 2008 Budget, the contributors were unanimous on the need for the tax system to be streamlined to make it simpler and business friendly.

They said the withholding tax was too high compared to what pertained in the West African sub-region and the administrative procedures too cumbersome.

The forum was organised by PriceWaterhouseCoopers, a consultancy and accounting firm, to receive inputs from its clients and other business concerns for the 2008 Budget which is scheduled to be presented to Parliament on November 15, this year, by the Finance Minister.

The accounting firm, which led the discussion with its own recommendations, said issuing Tax Clearance Certificates (TCCs) should be automatic and done concurrently upon payment to a cashier or when processed manually.

“Budget proposals should emphasise the granting of automatic withholding tax exemption for all large taxpayers. The proposed automated system should be reviewed and funds allocated under the budget to ensure proper functioning,” Mr Charles Egan, Country Leader of PriceWaterhouseCoopers (PWC), said at the company's 2008 Pre-Budget Forum in Accra.

His presentation bordered on how to streamline the customs, value-added tax (VAT) and the income tax systems to make the business environment friendlier.

Mr Egan said the undue delay in the processing and payment of duty drawback on imported raw materials was making exports from the country uncompetitive and defeated the purpose of the system and called for the use of credit system against future imports.

The firm also called for increased education and training for staff of the revenue agencies on practice notes, commissioner's ruling and general tax principles.

Participants called for the abolition of withholding tax or a reduction in the rate as well as a better administration of the system.

The private sector complained that withholding tax had on many occasions led to double taxation and the delay in refunds had also affected their cash flow.

Story by Samuel Doe Ablordeppey

   

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