BizNis Africa
Latest News
Tshimologong launches competition for improving travel across Africa
The SITA Air Transport Community Foundation, based in the...
Top 16 finalists announced for Next Einstein Forum CI2I Innovation competition
The Next Einstein Forum (NEF), an initiative of the...
AFRICA CEO FORUM will to honour African Start-ups
Each year, the AFRICA CEO FORUM Awards recognises the...
African Rainbow Minerals headline earnings increase by 15% to ZAR1 945 million
The African Rainbow Minerals (ARM) Board of Directors (the...
CANSO Global Vice Chair calls for collaboration in aviation industry
The Civil Air Navigation Services Organisation (CANSO) Africa Region,...
Top VAT opportunities for small businesses
The VAT increase, which comes into effect in just...
Nana Akufo-Addo to discuss Africa’s development at AFRICA CEO FORUM
The Ghanaian President, Nana Akufo-Addo with his strong stance...
Standard Chartered Bank launches first digital bank in Africa
Standard Chartered Bank today, 16 March 2018, announced the...
Tsogo Sun Entrepreneurs support Buy Local Summit
Tsogo Sun Entrepreneurs showcased their talent during the Proudly...
Sibanye-Stillwater files submission with South African competition commission
Sibanye-Stillwater and Lonmin Plc advise that Sibanye-Stillwater has filed...

Magnus Nmonwu, Sage West Africa Regional Director

West African governments are clamping down on non-compliance among business and individual taxpayers as they strive to improve their low Tax-to-GDP ratios or internally generated revenues.

As the tax year-end looms in Nigeria and Ghana, companies have an opportunity to evaluate whether their payrolls are fully compliant with the laws and regulations around collection of pay-as-you-earn (PAYE) tax.

Magnus Nmonwu, Sage West Africa Regional Director, says that the tax authorities in both countries are scrutinising more closely whether employers are complying with their tax obligations.

The Ghana Revenue Authority has embarked on an education drive to lift tax-to-GDP, which currently stands at 16.5%. It has accelerated its drive to bring small, medium and informal businesses into the tax net.

Nigeria, also seeking to improve its low Tax-to-GDP, has launched initiatives such as the Voluntary Assets and Income Declaration Scheme, which gives taxpayers an opportunity to voluntarily declare all previously undisclosed assets and income.

Some 90% of Nigeria’s 14 million taxpayers are salary earners paying PAYE. Government will be focusing heavily on rich individuals with undisclosed assets for enforcement.

Tax to fund development

“Without improving tax collection, West African countries will not be able to effectively finance the building of infrastructure and the provision of public services. We are seeing Nigerian and Ghanaian tax authorities take a more robust approach to registering tax payers and enforcing compliance to help the governments meet their tax collection targets,” says Nmonwu.

This means that businesses must ensure that they declare the correct earnings for all employees and that they include the right taxes and statutory deductions in payroll calculations. It has become increasingly important to ensure that annual returns are filed and submitted promptly and accurately to the relevant tax authorities to avoid penalties.

“Failing to comply – whether through deliberate evasion, late payment of payroll taxes underpayment as a result of a miscalculation – could cost your business dearly,” says Nmonwu.

“You could face large fines and penalty interest, or even imprisonment, for underpayment of taxes and statutory deductions.”

Out with spreadsheets

Because compliance is complex and the risks of non-compliance are high, West African businesses can no longer rely on spreadsheets and other manual methods to do their calculations and file returns. Automated solutions are becoming more essential for keeping reliable records and performing accurate payroll calculations.

Payroll solutions available for businesses from start-ups to mid-sized companies and larger enterprises – can help take care of calculating the complex formulas for the various deductions, generating compliance reports, and keeping accurate records. That makes it easier to perform accurate calculations, file submissions on time and generate reports and electronic payslips.

Tracking changing regulations

Automation makes it easier to keep track of changes to tax regulations that impact on payroll tax calculations and various changes in legislation. The software is constantly updated to align with the latest tax laws and tables, so one needn’t to update spreadsheet formulas or learn to make new manual calculations when changes are made.

“Business builders don’t go into business because they love filing tax returns,” says Nmonwu. “Using automated payroll software can help them save dozens of hours a year because they no longer need to worry about doing manual calculations or returns. Plus, they can rest easy knowing that automation reduces the possibility of human error. Payroll software takes the pain out of compliance, allowing business owners to focus on business strategy, customers, and employee engagement rather than on red-tape.”

Leave a Reply

%d bloggers like this: