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Internal
Revenue Amendment on repatriation of profit
Accra, June 10, Ghanadot/GNA- Sitting for less than 30
minutes on Tuesday, Parliament passed a law, which after the
President’s assent, would make it obligatory for any person
who makes profit or repatriates the profit to withhold a
final tax on the gross amount in accordance with a
prescribed rate.
Known as Internal Revenue (Amendment) Bill, the law amends
sections
of Act 592, and by the amendment, makes it mandatory for a
person who makes
payment to or for a non-resident person in respect of any of
the prescribed businesses to withhold a final tax on the
gross amount in accordance with a prescribed rate.
The passage of the Bill would make it obligatory for persons
who are partners of non-resident persons to withhold tax on
payment of fees under contract in respect of shipping, air
transport and telecommunication business.
The Bill also places an express obligation on branches of
foreign companies, in respect of branch profits repatriated
abroad, to withhold tax and pay the withheld tax and pay the
withheld amount to the Commissioner.
Section 66 of the outgoing Internal Revenue Act, 2000 (Act
592) on branch profits does not provide for any express
obligation on the payer of profit repatriated to
non-resident shareholders to withhold tax and pay the
withheld amount to the Commissioner until discoveries of the
payments are made through field audits.
Again, with respect to the business of shipping, air
transport and telecommunication services under section 67 of
Act 592; even though a rate
had been prescribed requiring the gross receipt to be
subject to tax at a prescribed rate, there is no express
obligation on the resident person to withhold tax on payment
of fees under contract.
The new clause introduced in section 67, subsection 3 of Act
592, is to correct the situation where the payer would
withhold and pay the tax as a final tax to the Commissioner,
which under the outgoing legislation is not so.
A Report from the Finance Committee of Parliament on the
Bill said the Bill would bring branch profits tax in harmony
with the existing dividend tax which was at the rate of
eight per cent.
When the House finally passed the Bill, there was a mix up
of hollers as to whether to adjourn proceeding for the next
day.
Mr Ebenezer Sekyi Hughes put the matter to adjourn to a
second vote before finally determining a vote of aye as some
members of the House spoke softly with one another that the
day was still young.
After adjournment, Members of the House, mostly from the
largest minority National Democratic Congress rushed and
shook hands with Mr. Dan Abodakpi, MP for Keta, who was in
the House for the first time, after his release from jail
following a presidential pardon for his incarceration on a
charge of causing financial loss to the State.
Mr. Kwamena Bartels, MP for Ablekuma North, from the
Majority side moved from his seat, and in a move of welcome,
shook and raised both hands with Mr Abodakpi, amidst a
hearty chat.
Mr Abodakpi told the press who besieged the Minority
Leader’s office that he felt great, very happy to be back in
Parliament to continue to represent his people and country.
He said, he was grateful to God and the President for the
release from jail. “I believed in my innocence, but I did
not know what instrument God would use for my release. I’m
thankful to God for his grace and granting me freedom.”
Mr Abodakpi said he never regretted serving the nation.
“It’s an honour to be of service to this country,” he said.
The MP, who is a former Minister for Trade and Industry,
said he believed a number of innocent people were
languishing in jail on wrong charges, and that they came out
later hardened.
He promised to make a statement to the House on the need for
some very major reforms in the prisons.
GNA
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