Taxes are imposed in almost every country mainly to generate revenue for government’s spending and other expenditure such as fiscal consolidation.
This is simply done by deducting a percentage of one’s income or the worth of one’s property etc. for government spending.
Taxes are obligatory such that it is not voluntary. Citizens who are eligible to pay taxes but do not are said to be evading taxes; an act, punishable by law.
In Ghana, the Ghana Revenue Authority is the body responsible for the collection of taxes.
There are four main components of taxes in Ghana, namely, taxes on income and property, taxes on domestic goods and services, international trade taxes and Value-Added Tax.
Income tax
This is imposed on the income generated by businesses and individuals and used as a source of revenue for government payments and spending.
Taxes on domestic goods and services
This type of tax is imposed on most goods and services sold for domestic consumption. This tax is paid by consumers but accounted to the government by the individual businesses
International trade taxes
This includes import duties, export duties, profits of export or import monopolies, exchange profits, and exchange taxes.
Value-Added Tax
A value-added tax (VAT) is a consumption tax that is levied on a product repeatedly at every point of sale at which value has been added.
Investopedia.com explains that when a raw material's producer sells a product to a factory a tax is applied; when the factory sells the finished product to a wholesaler a tax is applied also; now, when the wholesaler sells it on to a retailer another tax is applied; and finally when the retailer sells it to the consumer the consumer bears the tax as well. Read Full Story
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