(Chartered Accountants, Tax Consultants, Lawyers, Doctors, Engineers, etc.)
You will need a valid tax clearance to renew your practicing license
In line with the Provisions of the Revenue Administration Act, 2016 (Act 915) as amended, the Ghana Revenue Authority (GRA), has issued a directive to the Governing Councils of various Professional Bodies to make sure they obtain Tax Clearance Certificates from their members as part of the requirements for renewing their license.
This Directive affects professionals such as lawyers, accountants, doctors, engineers, architects and so on.
So, what will you need to obtain the Tax Clearance?
● If you have been working for sometime now, you should have filed your Annual Personal Income Tax (PIT) Returns for at least the previous three (3) years (i.e. 2019, 2020, 2021). If not, you should file your most recent Annual Personal Income Tax (PIT) Return (i.e. for 2021). The filing of Annual Personal Income Tax Returns is due not later than four (4) months after the end of the calendar year. Annual Personal Income Tax Returns for 2021 is therefore due by April 29, 2022. Also note that late filing of tax returns attracts a penalty of GHs 500.00 plus GHs 10.00 each day that the failure continues.
● Your employer must be up-to-date with all tax filings and tax payments. You may be wondering; this is my Personal Income Tax Return! How does my employer come in here? You know every month, it is your employer who deducts taxes (PAYE) and pays to the GRA on your behalf right? It is also easier to trace you through your employer. So, in essence, Tax Clearance Certificate serves as a compliance tool. It helps to assess if the employer and individual are compliant.
● Many Professional Services Firms operate on the basis of partnership. So, if you’re a Partner of a Partnership, you would have to file a Partnership Tax Return in addition to your Personal Income Tax Return.
Worried about penalties for failing to file Personal Income Tax Returns for previous years?
Fortunately for you, Parliament amended the Penalty and Interest Waiver Law recently to extend the application period for waiver of penalty and interest to June 30, 2022. What this means is that, if you failed to file any returns for previous years up to 31st December, 2020, you can apply for a penalty waiver.
Our final words to you
● As you can see, obtaining a tax clearance certificate is not that straightforward. So, you need to start putting your house in order.
● Employers should be prompt with their tax filings and clear all tax arrears so they don’t make the process complicated for the employee.
● Employees should file their Annual Personal Income Tax Returns on time to avoid potential penalties. Penalty waiver may not be available all the time.
● Partners of Partnerships should endeavor to file their Partnership Tax Returns and Personal Income Tax Returns on time.