Parliament questions GRA’s authority to suspend withholding tax
Parliament has challenged the authority of the Ghana Revenue Authority (GRA) to suspend the implementation of the Income Tax Act 2015 (Act 896) without recourse to the House.
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The Income Tax Act 2015, which was passed by Parliament and assented to by President John Dramani Mahama on September 1, 2015, was supposed to come into effect on January 1, 2016.
But following public uproar against the tax, the GRA directed all financial institutions to suspend the imposition of the one per cent withholding tax on interest earned by individuals as stipulated in the Income Tax Act.
A ranking member of the Finance Committee of Parliament, Dr Anthony Akoto-Osei, raised the issue in Parliament yesterday, pointing out that the GRA had no authority to suspend the act.
He said Parliament was an august House, and that when it passed an act, no institution had the right to suspend it.
Dr Akoto-Osei said it was crucial for Parliament to send a notice to institutions that they could not “negate” an act passed by the House.
He stressed that not even the President could amend an Act passed by Parliament. “If we pass an act, not even the President can amend it,” Dr Akoto-Osei added.
Speaker
The Speaker of Parliament, Mr Edward Doe Adjaho, supported Dr Akoto-Osei’s position and reiterated that the GRA had no authority to suspend the Income Tax Act that had been passed by Parliament.
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He said until such an Act was amended by Parliament, it remained in force.
Mr Adjaho asked the Majority leadership to take the issue up with the appropriate authorities.
Income Tax Act
The Income Tax Act, 2015 (Act 896) assented to by the President on September 1, 2015, was supposed to come into effect on January 1, 2016 to replace the Internal Revenue Act 2000 (Act 592).
Under the Act, all interest paid to an individual is to attract one per cent tax.
This means that any interest accrued on treasury bills, fixed income deposit, interest from banks among others, will attract a tax of one per cent.