• Self-assessment regime is a regime that allows the taxpayers to estimate their chargeable income in advance and their tax payable on the chargeable income.
• This allows the government to be able to make its projections on expected revenue from taxes and given that the taxpayers themselves provide the projections on their business activities they pay in comfort.
• The benefits of the self-assessment regime has reduced objections by taxpayers and interest and penalties.
• Self-assessment regime gives taxpayers greater equity and fairness, increased certainty and simplicity as it places greater responsibility on the taxpayer to assess their tax debt or refund.
  

PROVISIONAL ASSESSMENT:
It is an assessment that emanates from the office of the Commissioner-General which indicates a persons’ tax liability based on Commissioner General’s best judgement. It indicates the chargeable income and the tax charged. It also indicates the manner of objection.
SELF-ASSESSMENT:
This is a mode of assessment where the onus of determining the tax liability and the payment of the tax thereby is on the taxpayer. The taxpayer is expected to furnish the Commissioner with an estimate of the chargeable income and the tax liability at the commencement of his basis period.

(i) Under provisional assessment, there is usually a delay in the issuance and service of the notice of assessment. But self-Assessment avoids delay since the assessment is made by the taxpayer.
(ii) Under self assessment, there is trust between the taxpayer and the tax administrator
(iii) There is high frequency of objection under provisional assessment but self assessment minimizes the rate of objection since the taxpayer is involved in the determination of the tax liability.
(iv) There is a high cost of collection under provisional assessment but self-assessment reduces collection cost to the Revenue since the assessment is made by the taxpayer.
(v) Under provisional assessment, officers are much occupied in the issue of notices and have little time to attend to other matters. But self-assessment saves time for the Revenue Officers that can be used in reviewing cases of greater revenue potential.
(iv) Self assessment tends to make taxpayers more conscious of their tax obligations since they are involved in the process.
(vii) Promotes tax compliance and good citizenship

UNDER ESTIMATING ESTIMATED TAX PAYABLE
Chargeable Income (based on Returns)                                  = 1,800,000,000
Estimated Chargeable Income (Self Assessment)                  = 1,200,000,000
Estimated Chargeable Income                   = 66.67% of the Actual Income
i.e. (1,200,000,000/1,800,000,000) x100

PENALTY
90% of Tax payable based on Actual Income = 405, 0000,000 (90% of 450,000,000)
Estimated Tax (Self Assessment)   = 300,000,000
Difference = 105,000,000
Penalty = 30% of 105, 000,000 = 31,500,000

Self assessment regime is a type of assessment regime where a taxpayer is made responsible for accurately computing and reporting their tax liability. The taxpayers are required to estimate their taxable income and the tax thereon for the year of assessment. Tax payers on self assessment may file revision of their estimates and pay taxes in accordance with section 80 of the Internal Revenue Act 2000 Act 592 accordingly.
i. Persons on self assessment are persons specified in a notice published in the Gazette or in a print media by the Commissioner General.
ii. An estimate furnished under a revised estimate to the Commissioner General shall remain in force until revised by the person together with a statement of reason for the revision.
iii. Where the Commissioner General is not satisfied with the estimate or revised estimate, the Commissioner General may set aside the estimated assessment and provisionally assess the person.
iv. Under section 144 of the Internal Revenue Act, 2000 Act 592, where a person on self assessment makes an estimate or a revised estimate of chargeable income less than 90% of the persons actual chargeable income assessed for that year is liable to pay a penalty equal to 30% of the difference between the tax calculated in respect of that person’s estimate or revised estimate of that person’s actual chargeable income for the year.
v. Under section 48 of Internal Revenue Regulations, 2001 (LI 1675), the Commissioner General may permit a person to furnish an estimate prior to the date by which the person must pay the first installment of tax payable.                       (4 marks for any 4 points)

The benefits include but not limited to the following:
i. The taxpayer is given the opportunity to make the estimate which engenders trust. This makes the taxpayer confident of the system and helps them own their tax affairs.
ii. The tax payers know their personal circumstances and can make a better estimate under no duress. The taxpayer makes estimate which reflect their operations. However, it may also lead to low estimate at the early stage of the taxpayer’s business which will cripple government’s ability to raise enough revenue.
iii. The Taxpayers is at will to revise estimates so as to avoid any imposition of penalty as the circumstances of their businesses will dictate. This makes taxpayers to pay huge taxes at the last quarter as against earlier quarters.
iv. It reduces cost of doing business as it does not engender objection to provisional assessment which is very common under a provisional assessment regime. On the part of the business, cost increases as taxpayers will have to engage tax experts to help out.
v. It builds the technical skill of the taxpayers over the period. As the taxpayers furnish these returns over the years, they begin to appreciate the technicalities involved in the tax administration.
vi. It promotes healthy interaction between the taxpayers and the Ghana Revenue Authority. There is always constant engagement between the taxpayers and tax administrators.
vii. It promotes accurate record keeping by the taxpayers. The self assessment thrives on proper record keeping.
(6 Marks for any 6 points)