The Penalty and Interest Waiver (Amendment) Act 2021, Act 10781 was assented by the President of the Republic of Ghana on 30 December 2021 and came into force on 12 September 2022. In this alert, we highlight the key areas of the amendment act below:
Penalty and Interest Waiver
- The taxpayers will not suffer penalty and interest on outstanding tax liabilities in respect of the previous periods up to 31 December 2020 where the taxpayer meets the conditions for the waiver of interest and penalties.
- The taxpayer will also not suffer interest and penalties on outstanding tax returns in respect of the previous years up to 31 December 2020 upon meeting the conditions for the waiver for the relevant period.
Conditions for Waiver of Penalty and Interest
The waiver would be applicable where:
- The taxpayer, on or before 31 December 2022 (instead of 30 September 2021), submits the returns or amends the returns containing full disclosure of tax liabilities up to 31 December 2020 and;
- The taxpayer pays or makes arrangement to pay assessed and outstanding tax liabilities on or before 31 December 2022.
Application for the Waiver
A taxpayer who qualifies for the waiver shall from 1 July 2021 to 31 December 2022 (instead of 1 April 2021 to 30 June 2022) apply:
- To the Commissioner-General (CG) in written form and manner as determined by the CG and;
- Submit to the Commissioner-General, outstanding returns relating to the relevant years (previous years up to 31 December 2020).
Remission of tax
The Act does not derogate from the powers of the Commissioner General to remit tax under an enactment administered by the Commissioner General.
Reporting
The Commissioner-General is obliged to submit to the Minister:
- An end of year report indicating waivers granted as at 31 December 2022 and;
- A final report on total waivers granted as at 31 December 2022 (instead of 30 June 2022.
Takeaway
- The years under consideration for the waiver has not changed from the original Act and it is still up to the period 31 December 2020. This does not extend to interest and liabilities relating to periods from 1 January 2021.
- Taxpayers who could not meet their original arrangement for payment of outstanding tax liabilities should take advantage of the extension and notify the CG of a revised schedule with reference to the new deadline of 31 December 2022.
- Taxpayers must take advantage of the payment date extension from 31 December 2021 to 31 December 2022, in order to make appropriate plans to raise funds to make payments and utilize the waiver.
- Taxpayers must also take advantage of the existing relief of the waiver to voluntarily disclose and correct any errors noted in tax obligations to avoid future penalties and interest after 31 December 2020.
