The Ghana Revenue Authority (GRA) is intensifying efforts to monitor and collect rent income tax from landlords and property owners across the country. Despite high compliance, there is a perception that the real estate sector remains largely untapped by the tax authority.
Geospatial Data Project Boosting Revenue
The GRA is utilizing geospatial data and collaborating with District Assemblies to collect rent income tax efficiently. Isaac Kwabena Amoako, Head of the Project Management Unit at GRA, mentioned that the geospatial data software has been instrumental in enhancing the collection process.
The software, in use since 2020, allows District Assemblies to contact property owners, ensuring the payment of rent income tax.
Automated Collected and District Assemblee’s Role
The rent income tax collection has been automated since 2020, with District Assemblies playing a crucial role in contacting property owners within their jurisdictions. The use of digital records and geospatial data helps the GRA determine whether a property is rented or not.
Despite occasional contraventions, GRA is committed to ensuring compliance within the rent sub-sector.
Protective Measures Against Non-Compliance
Isaac Kwabena Amoako assured the public that the GRA would soon take action against landlords and property owners evading rent income tax. The software, combined with the collaboration with District Assemblies, has led to substantial revenue generation since its implementation in 2020.
Two-tiered Rent Tax Rates
The GRA has established two rates for rent tax: 8 percent for residential premises and 15 percent for non-residential premises. Landlords and property owners are required to pay the rent tax within 30 days of receiving the rent income. The Authority emphasizes the importance of property owners keeping copies of all rent tax payment receipts for inspection.
Interest and Penalties for Non-Payers
Failure to pay rent income tax on time attracts an interest rate of 125 percent of the statutory rate, compounded monthly. The GRA proactively reminds property owners to comply with the tax regulations and maintain proper documentation of their rent tax payments.
As the GRA employs technology and strategic collaborations to enhance rent income tax collection, landlords and property owners should be vigilant in meeting their tax obligations. The increased focus on this sector aims to ensure a fair and comprehensive taxation system, contributing to government revenue and economic development.