By Racheal Asamoah
Renowned tax expert, Dr. Ali Abdullah Nakyea has voiced support for Ghana Revenue Authority’s (GRA) policy to tax foreign earnings of resident Ghanaians.
Dr. Nakyea emphasized that this taxation measure should not be deemed as double taxation but rather as a progressive step towards fair taxation and national development.
Highlighting the rationale behind the policy, Dr. Nakyea pointed out that individuals who hold assets abroad contribute to the development of those jurisdictions through taxes. Therefore, in the spirit of equitable taxation, it is essential for them to also fulfill their tax obligations in their home country.
“I think that in the spirit of fair taxation, you have to disclose and contribute to what they have to give the government of Ghana because it does not amount to double taxation because we have gone on to the worldwide income. Our tax law gives you automatic tax credit. So, if they access your foreign income to tax, all you need to do is to bring evidence of the taxes you pay in those countries. And then the GRA will take account of it in reducing the tax you are to pay here,” he stated.
Dr. Nakyea urged Ghanaian residents with foreign earnings to comply with GRA regulations by disclosing their income. He highlighted a key provision in Ghana’s tax law which allows for automatic tax credit, enabling individuals to offset taxes paid abroad against their local tax liabilities, ultimately resulting in a reduction in their tax burden.
He explained that “You don’t end up paying double tax. There is automatic tax credit. You see, all those countries, they are citizens working here, all the expatriates we find here. They pay their taxes in their home countries as well.”
Contrary to misconceptions, Dr. Nakyea clarified that the taxation is not a one-size-fits-all approach. Instead, it will be calculated based on individuals’ income brackets, ensuring that the tax burden is proportionate and fair.
