…as Parliament approves Financial Account Information bill
Parliament has given legal backing to a new bill that will enable the Ghana Revenue Authority (GRA) to exchange information with other tax administrations in the world regarding certain financial accounts of entities or individuals, in a bid to curb tax evasion.
The bill, named Standard for Automatic Exchange of Financial Account Information, is to impose on financial institutions an obligation to report information regarding the financial accounts of reportable individuals or entities to the Ghana Revenue Authority and conduct due diligence with respect to the accounts.
Moving the motion for its approval on the floor of Parliament, Deputy Finance Minister Kweku Kwarteng indicated that critical to the fight against tax evasion is cooperation among tax administrations, and a key aspect of that cooperation is exchange of information.
According a memorandum accompanying the bill, the new global standard has led to the development of a model for automatic exchange of financial account information referred to as the Common Reporting Standard – allowing jurisdictions to automatically exchange financial account information with their exchange partners.
The object of the bill is to provide a legal framework for implementation of the Common Reporting Standard approved by the Council of the Organisation for Economic Cooperation and Development on July 15, 2014.
It is the outcome of a global effort in combatting offshore tax evasion and in improving transparency through the development of a platform for multilateral exchange of information.
Furthermore, the bill will seek to implement the common reporting standards approved by Council of the OECD, which designates the Commissioner General as the competent authority to ensure an improved international tax compliance by imposing on financial institutions an obligation to report information regarding certain financial accounts of an individual or entity to the GRA.
Chairman of the Finance Committee of Parliament, Dr. Mark Assibey-Yeboah, explained the rationale behind the bill.
“So, if anyone holds an account in the US, by passing this bill for exchange of information we can write to tax authorities in the US to furnish us with the account details of this Ghanaian. In the same way, by passing this, if there is a foreigner who has an account here and the foreign authorities want to find out, they can also write to the authorities.
So, if you have concealed any information anywhere or if you are supposed to be paying taxes and then we can’t identify your financial status, it then becomes important to pass this bill,” he told B&FT in an interview.
The memorandum accompanying the bill also states that vast amounts of money are kept offshore and go untaxed, for the reason that taxpayers fail to comply with tax obligations in their home jurisdiction.