Tax

Story: Leticia Ohene-Asiedu
THE Commissioner of the Internal Revenue Service (IRS), Major Daniel S. Ablorh-Quarcoo, says some religious leaders in the country are engaging in many income-generating activities which they know constitute business in the tax man’s language but are hiding behind Article 94 of the Constitution to evade the payment of tax.
He said, for instance, that men of God who publish and sell books and other recordings or engage in other commercial activities are liable to the tax laws of the country and asked such leaders to disclose all incomes they earned outside their core function of providing ecclesiastical services and pay the appropriate taxes on them.
Speaking at a seminar organised jointly by the IRS and the Value Added Tax (VAT) Service for religious bodies in Accra, Major Ablorh-Quarcoo noted that “if a religious body decides to buy a vehicle to run transport or buys a block- making machine or does an investment in a bakery and employs staff, whatever income that accrues from these business transactions is considered as trading activities under the law and is, therefore, taxable”.
He observed that in spite of that clear legal position, a number of religious leaders had taken advantage of the fact that incomes earned by religious bodies in the provision of ecclesiastical services were exempted from tax.
He then drew the attention of those leaders to James 4: 17, which admonishes that “To him that knows what is good but does it not, to him it is sin.”
He said they should also give meaning to the part of the Holy Bible which enjoined them to “render unto Caesar the things that are Caesar’s ....”.
Quoting Article 94 of the 1992 Constitution, Major Ablorh-Quarcoo said, “This section defines an exempt organisation to mean a person who functions as a religious, charitable or educational institution of a public character or a body of persons formed for the purpose of promoting social or sporting amenities.”
He said that meant that a religious, charitable or educational institution which was not of public character was not exempted from tax on any income earned by that institution and, therefore, subject to tax.
He assured all religious bodies in the country of the commitment of the IRS and the VAT Service to assist them to pay their taxes regularly and effectively.
The Chief Inspector of Taxes of the IRS, Mr F.E.K. Akoto, said activities of religious bodies such as the operation of transport, bookshops, guesthouses, schools, farms and bakeries were all taxable.
He said incomes of pastors that were taxable included money they received on special appreciation days organised for them by their churches, as well as incomes they received as authors, resource persons and employees of private businesses.
He appealed to religious leaders to file returns on all gifts received and pay requisite taxes on them.
Explaining the filing of tax returns, Mr Akoto said a tax return was an official statement of information from a person chargeable with tax under the tax laws to enable meaningful assessment to be raised on that person.
He said assets situated in Ghana, such as buildings of a permanent or temporary nature, land, shares, bonds, money, including foreign currency, and transportation, whether by land, sea or air, were all taxable gifts.
Mr Akoto advised all taxpayers, particularly religious leaders, to report any taxable gifts received within the year of assessment to the Commissioner of the IRS within 30 days of the receipt.
He said the returns should contain the description and location of the taxable gift, the total value of the gift, how it was calculated and the tax payable thereon, the full name and address of the donor of the gift and any other information required by the commissioner.