b. Condition of Use Taxes for Companies Limited by Guarantee in Ghana. Kusi Boateng: 'The system is working' Okoe Boye, Tension brews in Police Service over promotion, Otumfuo restores land forcefully seized from owner by Amakomhene. The CG is, therefore, an administrative officer within the meaning of Article 23 of the Constitution, 1992. They also have registered the Department of Social Development with National NGO Certificates of Recognitions with nos Reg. Status as Religious Organisation for income tax purposes. This legal status makes it easier for NGOs to operate, as they are not required to pay tax on the funding they receive from government bodies, donors, and other sources. If an NGO, a Section 8 organisation, or a charitable trust wishes for their donations to be excluded from income tax liability, they can apply for registration under Section 12 A. The maximum income tax rate in 2015 for single big earners is 39.6% on income over $413,200, amounting to tax due from Mayweather of about $120 million, barring any tax deductions he could claim. Similar sentiments has been expressed by his Excellency, President Nana Addo Dankwa Akufo-Addo. Non-Governmental Organizations (NGOs) Partnerships with non-governmental organizations help deliver services, enrich democratic processes, and meet constituent needs in the areas where USAID works. Learn more from these guidelines that will help you comply with all tax requirements in Ghana. List of Grant Funding for Individuals & Grants for NGOs. Tax Policy Issues. International Federation of Women Lawyers (FIDA), Ghana, Kantudu Youth For Education And Development (Kayed), Northern Childcare Voluntary Organisation, Northern Sector Action On Awareness Centre (Norsaac), Nsaba Ghana Schools (now located at Nsaba Ghana Community Projects), Oulamii Sooj African Drum & Dance Academy, Pro-Action Network in Education & Skill Training, Poverty Eradication, Youth Empowerment, And Wealth Creation, Regional Advisory Information & Network Systems, Science & Technology Advocacy Renaissance, The Hope Centre Mercy Ministries International, Volta Youth Soccer & Cultural Dancing Academy, Wunnam Northern Development Organisation, helping the less Privileged Children Through Quality Education, www.communityaidinternational.blogspot.com, Youth For Tradition International Exchange, Youth In Advancement In Community Development, Youth Embassy Net Organization (Free the Blind). Alcoholic beverages bottled, canned, contained in kegs for sale or packaged in any other form; Non-alcoholic carbonated beverages bottled, canned or packaged in any other form. Tax benefits. The following are important to take note of, one of legal frameworks governing the NGO sector is the Income Tax Act 1997. Do NGOS pay tax in Ghana? The exercise turned out surprising results. Salaries, wages, overtime, leave pay, bonus, and similar employment income. The annual employment income of the pastor of US$100,000 [8,333.33*12months] is subject to employment income tax (PAYE) using the graduated scale. In the year 2001, the Internal Revenue Act, 2000, Act 592, was enacted and came into force on 16 February 2001. The government in 2001 initiated measures to rope into the tax net private consultants, lawyers and those in professional practice some of whom were not paying taxes on their income. Who procured it and for what? Residents are subject to tax at rates ranging between 0% and 30% on the following annual graduated scale of income: Privacy Policy The NGOs which cannot generate their own income are completely depends on funders to pay their employer cost. The activities of IOM Ghana focus mainly on assisted migration and development, migration health services, voluntary return and reintegration, cultural orientation, counter-trafficking, emergency assistance, and resettlement. In order to be eligible for SSBI status an organization has to meet all conditions as set by the Dutch tax authorities. A tax auditor must assess whether the annual income of the pastor is enough to fund the investments he made during the year after allowing for consumption expenditure, other capital expenditure incurred and savings he might have made in the course of the year. File Annual Returns at Fifty Ghanaian Cedi (GHS 50) together with Audited Account. Disclaimer of Warranty, About Us Disclaimer of Warranty, About Us The official fee for registering a company limited by guarantee with the Department of Social Welfare is 1,200 for local NGOs and $1,200 for foreign NGOs who have their branches registered in Ghana. Can an NGO be converted into a Company Limited by Shares? The CG has issued practice notes to serve as a guide in the implementation of the law in this regard. In 2017, the annual income generated by a church from. Incidentally, even if there is no taxable income this does not negate the requirement to file an income tax return. Treatment of an Honorarium as Employment Income. Guide to Building a Profitable eCommerce Website, Self-Hosted LMS or Cloud LMS We Help You Make the Right Decision, ULTIMATE GUIDE TO BANJO TUNING FOR BEGINNERS. What is the cost of registering an NGO with Social Welfare? Advertisement. An honorarium is considered employment income for income tax purposes and is therefore subject to deductions. In other words, so long as a charitable organisation uses at least 75% of its income in their charity activities then there will be no taxable income. The CG is appointed by the President in compliance with section 13(1) of the Ghana Revenue Authority Act, 2009, Act 791. He is required by Article 23 of the Constitution 1992 to comply with the requirements imposed on him by Section 1(1) of Act 915 to administer and give effect to the tax laws of Ghana. Such income includes employment income, business income and property income. The operational NGOs, which primary concern is to develop projects and the advocacy NGOs whose major goal is to promote a cause. In terms of donor funding, in the current world that we are in, every penny of the donor must be accounted for. Income of religious leaders and/or employees of religious organisations. The surplus income can be utilized to carry on with the activities towards the fulfillment of the objective of the particular NGO. However, the interest or dividend accrued on such fund can also be utilized. In Matthew 22:21, Jesus was asked by the Pharisees whether it is lawful to pay taxes to the emperor, or not. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Congratulations! To achieve the intended purposes, NGOs require funding and normally this is in the form of contributions and grants that have been derived from other profit-making activities, that would have been taxed already. To this end, the following sectors deserve the attention of the Internal Revenue Service (IRS): manufacturing (small and medium size firms), the hospitality enterprises, construction and transportation sectors, and professional service providers. The learned judge also referred to the South African case of Chancellor, Master and Scholars of the University of Oxfordv. Commissioner for Inland Revenue, Republic of South Africa to support his position. Thus, it may have come from, use of the churchs tithes and offering to his personal benefit, and. Address description of the subscriber. This exclusion was removed in the Finance Act 2007 - and whilst arguably, one could still seek to rely on common law principles to insist on the need for a profit motive, it appears that this change was seeking to make such a motive unnecessary. Lets take a hypothetical illustration below to ascertain how the income of a religious leader (such as a pastor) should be taxed. The organization is a Non-Profit Organization whose aim is to help girls fulfill their purpose by educating them. This organization is a registered Non Governmental organization. 80G, 80GGA, 35AC(i& ii) and (i&iii) of the Act. The net amount due to the supplier is US$970. Mining firms thus appear to be more compliant with payroll deduction than other industries that operated in the economy in the nineties. Furthermore, it will go a long way to help promote a charity sector geared towards their traditional role of helping the poor and needy whilst building the spiritual life of the people. Youth World Travel Organization (YWTO) is situated in Ghana. The highest income tax rate payable by an individual resident in Ghana is 25%. In that audit, the company will have to supply the following relevant company source documents; During an audit, the tax officers typically assess whether the source documents agree with the audited financial statement that has been submitted to the GRA. The answer is simple: insofar as a religious organisation satisfies the above 2 conditions, they must register and comply with the VAT Act, 2013, Act 870 (as amended) and its Related Regulations. Firstly, in terms of common law for a person to be seen as carrying on a business, it is generally understood that there must be a profit motive - and indeed, this approach was also previously reflected in the income tax legislation, which prior to July 2017 explicitly defined the term business to exclude activities that are conducted without a profit motive. Company principally engaged in the hotel industry, Company engaged in the export of non-traditional exports, Financial institutions from loans granted to farming enterprises, Financial institutions from loans granted to a leasing company, Manufacturing companies located in regional capitals (except Accra & Tema), Manufacturing companies located outside Accra, Tema and the regional capitals, Free Zone Enterprises after 10 years tax holiday (on domestic sales), Free Zone Enterprises after 10 years tax holiday (on the export of goods and services), Annual audited financial statement not later than 30, VAT After the last working day, you will pay Ghc500. the name was changed in 2007 to Sports and Youth Development Organization Ghana. The predefined criteria include being a resident entity of public character that is established for relief of poverty or distress of the public, advancement of education, or provision of general public health, education, water or road construction or maintenance. Although it is trite knowledge that ignorance of the law is no excuse, it is also for the CG to ensure that all taxable persons are roped-in in the enforcement of the tax laws of Ghana. Tennis legend Roger Federer is the number five highest-earning athlete in 2015. One of the grievous misconceptions in the sector is the common assumption that all the charitable activities carried out by an NGO are exempt from GST. On the assumption that the pastor had already paid income tax in Ghana on his employment income and gift he received in the UK, he should also pay income tax on his undisclosed income of US$450,000. I hope it wouldnt take a court to compel the CG to do what he is supposed to do. Income subject to Tax under the Tax Law, a. Salaries are different between men and women. Jesus responded Render unto Caesar the things that are Caesar's, and unto God the things that are God's. It should be noted that in a situation where the assets are in the name of the church but are being used for the personal benefit of the pastor, the collateral benefit or benefit in kind should be assessed to tax in the hands of the pastor as required by law. , or not to compel the CG to do however, the Annual income generated by church. Ii ) and ( i & iii ) of the objective of the of... Firms thus appear to be eligible for SSBI status an Organization has to meet conditions... Includes employment income for income tax return ascertain how the income of religious organisations be more compliant payroll. An Organization has to meet all conditions as set by the Dutch tax authorities terms of donor,! To promote a cause to support his position sector is the cost of an! 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