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18.06.2016 Opinion

Is President Mahama corrupt by evading the payment of Gift Tax?

By Julius W.A. Afedi
LISTEN JUN 18, 2016

The President of the Republic breach the tax law of the state by evading the payment of Gift tax on the Ford Expedition in Manasseh awuni's exposé. If Mahama led Administration claim the Ford expedition is a gift but not a bribe. The question then is , did he pay Gift tax? Why is the president not setting good example for the citizens of this state. Why has he conceal this gift until now?

Tax exemption status enjoyed by presidents of Ghana. According to the Income Tax 2015 (Act 896), the salary, allowance, facilities, pension and gratuity of the President in accordance with Article 68(5) of the Constitution is exempted from tax. But not in the case of gift tax. If the president paid tax on the sale of his books my first coup " then why didn't he pay Gift tax in this Ford expedition case.

In a country where government keep increasing tax rates instead of widening the tax net, which is bringing untoward pressure on Ghanaians, even jail terms and the President who is the custodian of the land is Guilty and walk about freely. Don't forget leadership by example .

A gift is a receipt without consideration.
In Ghana any person receiving a taxable gift shall, within thirty (30) days of receipt, furnish the Commissioner with a return in writing.

Gifts tax is not only levied on monetary gifts but on bonds, shares, permanent structures and land that were presented as gifts.The value of a gift by way of per quite under section 8 (3) is determined as either the cost to the donor or how much it would yield when sold. With gift under section 105, however , the value is determined as the market price at the time or date receipt.

Gifts exempt from tax are

  1. By a person under a will or upon intestacy
  2. By a person from that person's spouse, child , parent, brother, sister, aunt, uncle, nephew or niece
  3. By a religious body which uses the gift for the benefit of the public or a section of the public
  4. For charitable purposes

Taxable gift are

  1. Buildings of a permanent or temporary nature
  2. Land
  3. Shares, bonds and other securities
  4. Money, including foreign currency
  5. Business and business assets
  6. Any means of transportation (by land, air or sea)
  7. Goods or chattels not included in the means of transportation
  8. Part of or any right or interest in , to or over any of the assets referred to above.

It is worthy of note that it is immaterial whether or not that person being taxed physical received the asset so long as the act omission or transaction inured or inured to the benefit of that person.

Ghana Revenue Authority (GRA) will strictly enforce the 15% gifts tax rate on any gift valued at GH¢50.

Amendment of the VAT Act 810 in 31st December, 2010, had increased the gifts tax from 5% to 15% and made it mandatory for IRS to charge it on gifts received from loved ones.

Where section 78 applies to a person and that person furnishes a return under section 108, the Commissioner is deemed to have made an assessment of the value of the taxable gift received by that person and the tax payable on that assessment are those respective amounts shown in the return.

It must be emphasized that the knowledge of this law is very limited in Ghana. Therefore it affects the application of it. Though data is not readily available at the Ghana Revenue Authority on the percentage of Ghanaian who of their will, file and pay their gift tax returns my observation indicates poor compliance of this law. It beholds on each Ghanaian who receives a gift to take the necessary steps and file the returns.

In a country where companies are bullied by President task force on tax related issues. Dr Clement Apaak

Asked if the companies will be required to pay any penalty for evading tax or failing to meet their tax obligation responded; “they will pay an Interest or penalty of 300%...defaulted companies must meet this requirement by paying this interest or risk being hauled court again.”

“…No company is above the law…any refusal or failure to pay up the interest or penalty is also another offence altogether…Their evil deeds have been uncovered,” he said.

So in the case of the President what will this task force and the Commissioner do? Ghanaians expect better from them, if the President Mahama is wrong he should be dealt with as the laws of the state demands. No one is above the law. Taking a look at the tax law when the said gift was received.

Julius W.A. Afedi

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