IRS LAUNCHES TAX EDUCATION CAMPAIGN (PAGE 30, JUNE 30)

A Tax education seminar has been held in Tamale with a reminder to landlords not to increase rent charges as a pretext of using the additional funds to honour their tax obligations.
“Rent tax is paid by the property owners who receive rent income; it is not the tenant who pays the tax and, therefore, this should not lead to increase in rents,” the Tamale District Manager of the Internal Revenue Service, Mr Kwame Fordjour stated.
According to him, rent income is an income that is derived when a person or an individual gives a residential or commercial premises or structure for use by another person.
“Rent is the money paid for the use of the property, rent tax is, therefore, paid from rent income.”
He further explained that rent income was taxed at the rate of eight per cent and the year of assessment is from January 1 to December 31 of the same year, and that the rent income was calculated separately at a flat rate of eight per cent.
“Under this option, no deductions are allowed as provided under Section 17 of Act 592.”
The manager also stated that under the existing laws, some institutions were qualified to withhold the rent tax. He mentioned educational institutions, medical establishments, public boards and corporations, ministries, diplomatic missions and international organisations as some of the beneficiaries.
Mr Fordjour, however, stated that “any institution or organisation which fails to withhold the tax is personally liable to pay to the commissioner the amount of tax which has been withheld.”
In respect of companies that engaged in real estate business, he said, the income of a company in a business of construction for letting of residential premises is exempt from tax for a period of five years of assessment, commencing from and including the year in which the basis period of the company ends.
The manager added that the income of a company in the construction business for sale of residential premises is also exempt from tax for a period of five years.
He, therefore, entreated all income earners to voluntarily honour their tax obligations as partners in national development.
The Chief Executive of the Tamale Metropolitan Assembly, Alhaji Abdulai Harruna Friday, urged tax officials to come out with more innovative means of collecting taxes from the people.