In Ghana, the Same VAT code has different accounts involved when used as purchases or sales.
Get fund and NHIL levies which are to be charged alongside VAT are not subject to input tax deduction. These levies are to be collected and paid to the tax authority when used on sales invoices.
(VAT 12.5 is calculated on the Taxable value + Get fund + NHIL making the effective tax rate 18.125%)
This technically means that we have to use two tax codes always. Some industries have specific levies they levy along with VAT (e.g 1% tourism levy) on their sales invoices. A separate document can be issued for this levy but since only one tax code can be selected for transactions in many applications, they are usually added to the VAT tax code.
If we could select expenses for these tax code lines it would simplify things a lot. I know asset accounts can be selected and a journal entry made to correct things but it wouldn’t be neat bookkeeping.
@lubos I suggest you allow users to access income statement accounts in the tax codes set up to help people in places where some of the Tax codes with multiple tax rates are not like the regular deductible tax rates.
Visit the tax authority’s page (Ghana Revenue Authority/GRA)
KEY FEATURES ON THE NHIL & GETFund