- 6 Marks
Question
The Income Tax Act, 2015 (Act 896), as amended, requires all taxpayers to be on self-assessment as taxpayers know better their circumstances for tax purposes.
Required:
Evaluate FOUR (4) benefits of the self-assessment regime.
Answer
The self-assessment regime offers the following benefits:
- Increased accuracy and fairness
- Taxpayers are in the best position to know their income and circumstances, which leads to more accurate and fair tax calculations. Self-assessment allows them to report their tax liabilities more accurately, based on their specific situation.
- Reduced disputes and objections
- Since taxpayers are involved in determining their tax liabilities, there is a lower likelihood of disputes or objections over tax assessments. This can result in smoother interactions between the tax authority and taxpayers.
- Faster collection of taxes
- Self-assessment encourages timely and accurate filing of tax returns, allowing the tax authority to collect taxes earlier, which improves cash flow for the government and aids in achieving revenue targets.
- Promotes voluntary compliance
- By empowering taxpayers to assess their own tax obligations, the self-assessment regime fosters a culture of voluntary compliance. This reduces the need for aggressive tax enforcement actions and penalties.
- Tags: Self Assessment., Tax Compliance, Tax Revenue, Taxpayer Responsibility
- Level: Level 3
- Topic: Tax administration in Ghana
- Series: NOV 2018
- Uploader: Dotse