Deputy Managing Partner for Ali-Nakyea and Associates, Ismail Ibn Ibrahim shared tips on how SMEs can manage their tax liabilities in a presentation on the Citi Business Festival on-air series on Wednesday, June 8, 2022.
Ismail Ibrahim noted that the tax conversation is a critical component of every business.
“This is because the GRA or the state is a de facto shareholder of the company, whether or not you make profits.”
“It is therefore imperative for every business, no matter the size, to take tax issues seriously.”
He shared the following tips on managing tax liabilities;
Make self-estimate assessments
Ismail Ibrahim explained this as “the situation where you tell the GRA how much you anticipate in a year and how much tax you are supposed to pay.”
“For example, if you anticipate a GH₵1,000 in a year and your tax liability is around GH₵200, you could reduce your estimation because you need time value of money to say GH₵150. That way, you will have an extra GH₵50.”
He clarified that the point of this is not to overly underestimate “because there is a penalty for underestimating tax to less than 90%. So you have to make sure you review it correctly.”
Take advantage of the opportunity to apply for extensions
“You are supposed to file your returns and pay your taxes at the time of return. If you anticipate you will not be able to have the money to pay the taxes, you can apply to the Commissioner for an extension of time within which to pay your tax or to file your return.”
Take advantage of opportunity to apply for exemption from withholding tax
He noted that this opportunity is only offered to taxpayers who have proven to be compliant.
“The withholding tax is when you are paying for a service and your tax is withheld in advance for you. If you do not want to suffer this, you can apply for this tax. If you are a very compliant taxpayer, there is an opportunity for you to apply for an exemption from withholding tax that will allow you some cash flow,” he added.
Plan your taxes
He noted that the first step in planning your taxes is tax compliance.
“You do not want to be mopped with interests and penalties for failing to pay your taxes.”
“You need to arrange your affairs in such a way that you do not overly pay taxes. It is your responsibility to pay tax, but you are not obliged to pay tips on taxes.”
https://soundcloud.com/citi97-3/unravelling-the-tax-maze-for-smes-with-ismail-ibrahim-deputy-managing-partner-ali-nakyea-and-associates
The entire month of June is dedicated to business on Citi TV and 97.3 Citi FM.
The Citi Business Festival is an extensive program of business events and on-air activities providing inspiration, business ideas, and information to persons who are starting, building, or growing their businesses.
The on-air series will air on the Citi Breakfast Show on 97.3 Citi FM every weekday.
ABSA Bank is the main sponsor of the Citi Business Festival 2022 and is supported by MTN Momo and MTN Business, IT Consortium and the Ghana Investment Promotion Centre (GIPC), and GIRSAL.
