• 5 Marks

AT – Nov 2024 – L3 – Q2c – Extension of Time and Early Filing of Tax Returns

Explain the conditions for tax return extension and early filing requirements.

Akosua Sokode has set up a small business to sell cosmetics in Accra. She just called you, an associate member of the Institute of Chartered Accountants Ghana, to seek your advice on tax returns and payment of taxes. Akosua Sokode told you that she cannot meet her tax payment deadlines and cannot file tax returns by the due dates. She also confided in you that maintenance of documents is a big problem for her.

Required:

Address the concerns of Akosua Sokode by briefing her on the following:

i) THREE factors regarding the extension of time for filing tax returns.

ii) TWO circumstances under which the Commissioner-General may request for filing of tax returns before the due date.

i) Three Factors Regarding the Extension of Time for Filing Tax Returns

  1. Application for Extension in Writing

    • A taxpayer must formally apply in writing to the Commissioner-General for an extension before the due date.

  2. Justification for Extension

    • The taxpayer must provide a valid reason, such as being out of the country, illness, or unforeseen circumstances preventing compliance.

  3. Maximum Extension Period

    • The Commissioner-General can grant multiple extensions, but the total period cannot exceed 60 days from the original due date.

ii) Two Circumstances for Early Filing of Tax Returns

  1. Imminent Business Closure

    • If a taxpayer is about to cease business operations, the Commissioner-General may require early filing of tax returns.

  2. Taxpayer Leaving the Country Permanently

    • If a taxpayer is relocating permanently outside Ghana, they may be required to file returns before their departure.
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