By Laudia Sawer
Tema, Aug. 06, GNA – Mr Gilbert Yirenkyi Addo, the Associate Director, Business Tax at Deloitte Ghana, has debunked claims by small and medium enterprises (SMEs) that keeping proper business transactional records leads to higher taxation.
Mr Addo stated that “it is a misconception by most SMEs to think that if they keep proper records, the Ghana Revenue Authority (GRA) will know their true worth and tax them accordingly. Record keeping is not only for tax purposes.”
He addressed the misconception when speaking at a one-day SME Business Interaction Session organised by the Access Bank (Ghana) PLC, in partnership with Deloitte, on the theme “SME Financial Empowerment: An Imperative for Business Resilience.”
He said once people decide to do business, they must be transparent, indicating that doing business means signing a social contract with the public and state; therefore, it is important to contribute their quota to the development of the state.
He added that the state recognises the challenges businesses go through and therefore has created structures to ensure that they receive some benefits from the taxes they pay while matching their taxes to the appropriate expenses of businesses.
The tax expert explained that taxes are not computed on the revenue but rather on the profit after the expenses incurred in doing the business have been deducted from the revenue.
“Tax is a social responsibility, and I always say that keeping records is not necessarily for tax. Today you conceal some form of information; that is more of a criminal activity. SMEs should note that whatever you procure, there is a central point where information could be gathered. So, if you keep proper records, you also get tax incentives. For instance, if you buy an asset, the tax law gives you the opportunity to enjoy what we call capital allowance. It is a relief that we need to reduce the baseline for you paying taxes,” he stated.
Mr Addo further explained that if records on the purchase of the asset were not kept, the tax administrators would therefore rely on their own information to compute the tax, stressing that keeping records and paying taxes benefitted both the SME and the state.
GNA
Edited by Kenneth Odeng Adade