CORPORATE MANAGERS URGED TO DISCLOSE INCOME SOURCES (PAGE 32)

Story: Abdul Aziz

An Assistant Commissioner of Internal Revenue Service, Mr Peter Kornor, has warned corporate managers whose lifestyles are far above their remuneration that they could be charged for tax evasion when dragged to the Commercial Courts.
He, therefore, urged corporate managers to disclose all their sources of income when filing their tax returns to the Commissioner of IRS.
Mr Kornor, who was addressing the second meeting of users committee of the commercial courts in Accra on Thursday, observed that the remuneration for the work of some Managing Directors were visibly insignificant to support their lifestyle.
He said when this was detected especially from tax returns the explanations often advanced by managers were that they made up for the shortfall by receiving rents from their self-acquired houses.
Mr Kornor said where an individual received rent income from any residential or commercial premises the commissioner might calculate tax on the rent income separately.
He explained that the commissioner had powers of discretion to add the manager’s rent income to his employment and have it taxed together as employment income.
He said the commissioner in so doing would be guided by the idea to prevent any intentional arrangement designed by the manager to avoid payment of appropriate taxes.
He said the commissioner would also be guided by the fact of ensuring that maximum revenue was collected for the state.
The Assistant Commissioner said these considerations were what informed the commissioner’s interpretations of the tax laws where the taxpayer disagreed with any assessment of tax on income.
He said even in countries where judicial interpretations of tax laws appeared to provide escape routes for taxpayers the trend was changing in favour of national fiscal considerations.
Mr Kornor said the principle of interpretation of tax laws now emerging was that rights and liabilities created by sham transactions were utterly disregarded.
He said any flagrant attempt to create an artificial loss was rejected as cheap exercise of fiscal conjuring and bookkeeping fantasy.