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25.11.2005 Business & Finance

IRS begins review of tax stamp system

IRS begins review of tax stamp system
LISTEN NOV 25, 2005

Accra, Nov. 25, GNA - The Internal Revenue Service (IRS) is reviewing some aspects of the new tax stamp system to help in revenue mobilization especially from the informal sector which otherwise would have escaped the tax net.

The revision follows some concerns raised by some tax stamp payers that the rates were too high.

The Commissioner of VAT Service, Mr Odartey Blankson said on Friday that the rates were being reviewed for next year and negotiations were ongoing for payment in instalments.

The implementation of the tax stamp system started early this year, with the categorization of each identifiable group and the rate attached to it.

"It is a way of making the payment of taxes easy for those who otherwise would be subject to penalties for non-payment of their annual tax and, therefore, risked prosecution upon detection," Mr Blankson said.

At the moment, identifiable groups under the Tax Stamp System are dressmakers; susu collectors; chop bar operators; cooked food sellers; butchers; hairdressers; garage owners; diamond and gold winners and buyers.

The Internal Revenue Service Amendment Regulations 2004 (LI 1803) makes it mandatory for those who are not members of any association to purchase the stamps from the IRS direct.

During an interaction with about 100 large taxpayers, Mr Blankson announced that the Large Tax Unit (LTU) system since its inception had collected about 55 per cent of all revenue generated annually through the IRS and the Value Added Tax (VAT). He said the VAT Service had also initiated serious moves to introduce e-payment of taxes where people and businesses would pay taxes without going to VAT offices.

Mr John Sotenga, Director LTU, took taxpayers through the process of tax payment and addressed problems relating to tax refunds, taxpayers' role as per withholding tax agents and exemption on import tax and tax clearance. The Large Tax Payers com e from the banking, manufacturing and other sectors.

Mr Blankson had earlier interacted with 100 large taxpayers to find out how they were coping with their duty as taxpayers.

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