IFRS / IAS Adoption and its Tax Challenges and Management – Views from Ghana

Abstract

This study investigates the tax challenges that face the adoption of International Financial Reporting Standards (IFRS) by Ghanaian listed firms and how it could be manage. In particular, this study documented the tax challenges and management of IFRS / IAS adoption from the perspective of preparers of financial statements in Ghana. The researchers used descriptive research design and the evidence was obtained by means of structured questionnaire and semi-structured interviews. The results of the study indicate that IFRS / IAS adoption by Ghanaian entities has faced some obstacles such as apparent complexities and voluminous in disclosure, measurement, recognition of items, increased adjustment from financial accounting to tax accounting, the absence of general guidelines from ICA – G / CIT-G and the GRA on tax treatment following IFRS / IAS adoption. Data collections came after barely six years after the preparations of these financial statements, thus it is therefore possible that findings could be affected by time-related updates.Nevertheless, surveying preparers' views is a useful exercise as views may influence acceptance of and the incorporation of how to manage those tax challenges of IFRS / IAS adoption. Our emphasis was more on real costs and taxation difficulties of adoption than on perceived cost and tax challenges. The researchers recommend that the management of tax challenges and its management should or can be share with industry stakeholders for further discussions and debates in framing guidelines on tax treatment due to IFRS / IAS adoption. Also, there should be incorporation of IFRS / IAS concepts and procedures into accountancy educational curriculum and provision of capacity building and development for all relevant stakeholders engage in the implementation and continuous survival of IFRS / IAS in Ghana. Future researches could be carried out to investigate whether IFRS / IAS tax challenges associated with its general adoption challenges.