Taxes are inevitable. Whether you own your own business or work for someone else’s, taxes serve a fundamental role in funding the salaries of government workers and supporting common resources like paved roads and well-equipped taxes.

On Tuesday at Mövenpick Ambassador Hotel in Accra, Joy Business – powered by PwC – hosted an informative discussion designed to engage the public on paying taxes intelligently. The event, called “Intellitax,” is in part of Joy Business’ Knowledge Series.

“For a lot of entrepreneurs, everyone thinks of direct taxes because it’s what hits you,” said Gifty Andzie, a PwC consultant. Andzie explained that in some cases, business owners sometimes unintentionally forget to itemize personal deductions causing setbacks when audits arise.

“It is really sad when there is an audit done on a business and the authorities see mishaps and they levy penalties.”

She added that the amount one pays for taxes is not “one-size-fits-all.” There are many kinds, including a “corporate income tax,” a tax levied by the government and is assessed based off of the company’s profits. For small- and medium-sized enterprises (SME’s), corporate taxes can be reduced to a “modified taxation,” which sets a criteria stating that if a business owner earns less than GH¢200,000, among other conditions, the GRA allows the business to pay only 3% taxes off of its revenue.

Then there is the “young entrepreneur regime,” says Gifty Matey, a senior manager at PwC, who says the regime targets people that are 35 years and younger. Businesses owned by those in this category are exempt from paying taxes for five years.

Neither the “corporate income tax” nor the “young entrepreneur” regime existed before 2016, Matey added. “The encouragement is that we are taking advantage of this as a nation. If you qualify, you can have some compliance and pay fewer taxes.”

Laura Torgbenoo, a tax compliance and tax advisor at PwC, clarified that the VAT, the controversial tax that many thought would rise during Finance Minister’s Ken Ofori-Atta’s Mid-year budget review last year. The tax, currently at 12.5%, is dependent on “what the business does and what the business makes.”

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“Medical services are exempt from the VAT because it is a medical job,” said Torgbenoo. “Auctioneers and performer also have slightly different rules.”

Lastly – but surely not least – is the employment tax, which is important, said Andzie, because “we all care about our salaries.”

“If you miss some compliances and forget to do something, the employer is targeted. Do not treat payroll items as non-taxable items,” she advised.

For instance, if an employer gives an employee GH¢1,000 gift for a job well done, that money is taxable and it is the employer’s responsibility to ensure so.