Exempt new timber vendors from producing tax certificate – GRA
Mr. Anderson Yakubu, Principal Revenue Officer (PRO) with the Tax Audit and Quality Assurance Department of the Ghana Revenue Authority (GRA), has advised that first-time timber vendors in the country be exempt from producing tax clearance certificates (TCCs) as pre-requisite for registering with the Timber Industry Development Division (TIDD) of the Forestry Commission.
“The TIDD should proceed to register timber vendors who approach the division to register for the first time without demanding tax clearance certificate (TCC) as a requirement, I think,” Mr. Yakubu stated during educational engagements with timber vendors in selected timber markets in Accra on documentations required for registering with the TIDD as a timber vendor in Ghana.
He explained that, “This is because, if the person is just starting the business or even in the process of commencing the business, the person has no tax obligation as no profit has been made yet”, adding that, “TCCs are issued upon request and fulfillment of tax obligations. However, here is the case, the said business is yet to commence or perhaps has just commenced and no tax has been paid yet, so how is the vendor supposed to come by the TCC?”
Justifying his statement, Mr. Yakubu said, requirements such as this, give room for recalcitrant tax officers to take advantage of innocent individuals who wish to comply with regulation requirements. Rather, he suggested that, the TCC be demanded during renewal of the registration as by then, state of the business within a period would have been determined (making profit or loss) and tax obligations would have been satisfied to enable obtaining the TCC.
“Registration processes should not be made cumbersome for businesses as this deters many SMEs from being compliant with national registration regulations. In the end, it is government and the entire country that loses revenue which would have been generated to certain individuals” – Mr. Anderson Yakubu added.
It is a requirement for retail vendors of timber on the domestic market of Ghana to be registered with the Timber Indus try Development Division (TIDD) of the Forestry Commission (FC) of Ghana. However, most timber retail vendors have not been able to register with the TIDD due to challenges in acquiring certain documentations which are prerequisite for their registration with the TIDD.
Among the requirements for registration with the TIDD as a timber retailer are; certificate of business registration (which is obtained from the Registrar General’s Department upon the successful registration of one’s business) and a tax clearance certificate (obtained from the Ghana Revenue Authority-GRA upon the successful filling of tax returns). Acquisition of these documents is noted to be of great challenge to the timber retailers therefore hindering their onward registration with the TIDD.
To facilitate SMEs access to buyers in the timber market, Nature and Development Foundation (NDF) as part of implementing the project, “Building the Capacities of Small and Medium Scale Forest Enterprises in Ghana and Liberia to Trade and Supply Legal Timber – Phase II”, developed an online platform (www.ghanatimbermarket.com) to link buyers of wood to vendors of legal wood. The requirements for vendors to be listed on the platform is to be registered with the TIDD and also to deal in legal wood. The platform is viewed by most people as a great innovation however, the platform is currently inactive due to inability of vendors to be listed on the platform because they are not registered with TIDD. Which TIDD registration is consequently challenged by vendors’ subsequent registration with RGD and GRA.
To help resolve the challenge, NDF has collaborated with the TIDD of the Forestry Commission and the GRA, to educate timber vendors on the processes and procedures to register one’s business, file tax return and obtain a tax clearance certificate. Timber markets which benefited from this all important education are the Muss Timber Market, Accra Timber Market, Tema Timber market, Ashiaman Timber Market, Sokoban Wood Village, Ahwiaa Timber market, Akwadaso timber market, Kyireapatre timber market and Santaase timber market. At the end of the education, vendors in each of the timber markets visited were enthused to get registered with TIDD and also to trade in legal wood to facilitate listing of their products on the online platform.
AUTHOR
Nature & Development Foundation
