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- 4 Marks
Question
One of the innovations by the Ghana Revenue Authority is the introduction of the Withholding VAT Scheme. The scheme is aimed at promoting tax compliance.
Required:
Explain FOUR (4) objectives of the scheme.
Answer
The objectives of the Withholding VAT Scheme are:
- Reduces Nil and Non-Filers: Reduces the number of nil and non-filers, as surveillance and monitoring ensure that deception in filing is minimized.
- Reduces Future Uncollectible Debts: The scheme collects VAT upfront from major consumers, thus reducing future uncollectible debts.
- Increases Voluntary Registration: Taxpayers, knowing they are being monitored, voluntarily comply with the obligations under the law.
- Improves Revenue Flows: The government can raise revenue through this medium, promoting compliance and ensuring efficient collection.
- Enhances Compliance: The scheme has generally improved compliance among taxpayers.
- Promotes Fair Application of Tax Laws: Ensures that the tax laws are fairly applied to all taxpayers.
- Tags: Ghana Revenue Authority, Revenue Collection, Tax Compliance, VAT Scheme, Withholding VAT
- Level: Level 2
- Series: NOV 2021
- Uploader: Theophilus