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Domestic Tax News

Amendments to The Income Tax Act, 2015 (Act 896)

The Commissioner-General of the Ghana Revenue Authority (GRA) wishes to inform the general public that the following amendments have been made to the Income Tax Act, 2015 (Act 896) by the Income Tax (Amendment) Act, 2015 (Act 902).

1. First Schedule to Act 896 Amended as follows:

(a) Act 902 has revised the First Schedule to Act 896 by reviewing upwards the Income Tax Bands applicable to Resident Individuals. Consequently, the tax bands applicable to resident individuals are:

ANNUAL INCOME TAX RATES APPLICABLE TO RESIDENT INDIVIDUALS

CHARGEABLE INCOME

GH₵

RATE %

TAX

 

GH₵

CUMULATIVE CHARGEABLE INCOME

GH₵

CUMULATIVE TAX

GH₵

First 2,592

Free

Nil

2,592

Nil

Next 1,296

5

64.80

3,888

64.80

Next 1,812

10

181.20

5,700

246.00

Next 33,180

17.5

5,806.5

38,880

6,052.50

Exceeding 38,880

25

 

 

 

MONTHLY INCOME TAX RATES APPLICABLE TO RESIDENT INDIVIDUALS

CHARGEABLE INCOME

GH₵

RATE %

TAX

 

GH₵

CUMULATIVE CHARGEABLE INCOME

GH₵

CUMULATIVE TAX

GH₵

First 216

Free

Nil

216

Nil

Next 108

5

5.40

324

5.40

Next 151

10

15.10

475

20.50

Next 2,765

17.5

483.88

3,240

504.38

Exceeding 3,240

25

 

 

 

(b) by the substitution for subparagraph (6) of paragraph 3 as follows:

“(6) The chargeable income of a company for a year of assessment from a manufacturing business not included in subparagraphs (1) and (3), other than a manufacturing business located in Accra and Tema is taxed at the rates indicated below:

 

LOCATION

RATE OF INCOME TAX

a

Manufacturing business located in the regional capitals of the country

75 percent of the rate of income tax applicable to other income under subparagraph (1)

b

Manufacturing business located elsewhere in the country

50 percent of the rate of income tax applicable  to other income under subparagraph (1)

c. by the insertion after paragraph 8(1) (c)  (ii)) of 

“(iiA) in the case of service fees referred to in Section 116(1) (a) (vii), fifteen percent”.

2. Second Schedule to Act 896 Amended

Act 902 has amended the Second Schedule to Act 896 as follows:

(a) by the substitution for paragraph 5 of 

“Presumptive Tax based on turnover 

(5) where presumptive taxation applies to an individual as referred to in paragraph 2 (1) (c ) (ii) ,the tax payable by that individual for a for a year of assessment under section 1(1)(a) is three percent of the turnover of the business, where the turnover is more than twenty thousand cedis but does not exceed two hundred thousand cedis” and 

(b) by the substitution for paragraph 6(1)(b) of 

“(b) the turnover of that individual does not exceed two hundred thousand cedis, calculated using the modified cash basis”.

These amendments took effect from 1st January, 2016. The Commissioner-General requests the general public particularly taxpayers in the informal sector, businesses, business owners, directors of finance, tax professionals, accounting staff, accountants, auditors, tax consultants, tax advisors and paymasters to take note and comply accordingly.

COMMISSIONER-GENERAL

GRA- INTEGRITY FAIRNESS SERVICE

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Payment of Withholding Taxes – January, 2016

ALL WITHHOLDING TAX AGENTS TO NOTE

Are you aware that withholding taxes must be paid to the Domestic Tax Revenue Division (DTRD) of the Ghana Revenue Authority (GRA) by the 15th of every month?

Do you know that withholding taxes deducted from employment, payment for goods and services and all other withheld taxes for January 2016 are due by 15th February, 2016? 

Pay all withheld taxes on due dates.  All payments should be made with an accompanying schedule, in both hard and soft copies, indicating gross amount, the tax deducted and name(s) of taxpayer(s) from whom the taxes were withheld. 

Please be reminded that failure to pay the tax withheld on due date attracts a penalty of 20% (for not more than 3 months) and 30% (exceeding 3 months) in addition to the tax unpaid.

COMMISSIONER-GENERAL

GRA- INTEGRITY FAIRNESS SERVICE

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Suspension of 1% Withholding Tax on Interest Earned By Individuals under Income Tax Act 2015, (Act 896)

We wish to bring to attention that Government has submitted proposals to Parliament for amendment of the relevant sections of the Income Tax Act 2015, (Act 896) to reverse the imposition of 1% withholding tax on interest earned by individuals.

In this regard, financial institutions are directed to suspend the imposition of 1% withholding tax on interest earned by individuals.

COMMISSIONER-GENERAL

GRA- INTEGRITY FAIRNESS SERVICE

 

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New Corporate Tax Rates

The Commissioner-General of the Ghana Revenue Authority (GRA) wishes to inform the general public that by

virtue of the Income Tax Act, 2015 (Act 896).

 

1.             The following chargeable incomes are subject to corporate tax at the rates specified in the table below.

                                                                WITHHOLDING TAX

Entity

Corporate  Tax Rate %

Approved Unit Trust And Mutual Fund

 

Approved unit trust scheme and mutual fund for the first 10 years

1

Income from qualifying venture capital financing company for  the first 10 years

1

 

AGRO PROCESSING COMPANIES

 

Agro processing business conducted wholly in the country for the first 5 years

1

Cocoa- by product business conducted wholly in the country for the first 5 years

1

Rural banking business for the first 10 years

1

Tree crop farming for the first 5 years

1

Cash crops or livestock(excluding cattle) for the first 5 years

1

Waste processing business for the first 7 years

1

Income derived from letting for sale of low cost affordable residential premises approved by Minister for Works and Housing for the first  5 years

1

Chargeable income of trust

25

            

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2. The following incomes are subject to withholding tax at the rates specified in the table below.

Income

Rate (%)

Comments

Interest paid to Individual

1

On Account

Fees, allowance to resident director/manager, board member, trustee

20

On Account

Fees to lecturers, invigilators, examiners, part-time teachers, non-executive directors/board members and endorsement fees

10

Final

Commissions to insurance agents, sales and persons

10

On account

Commissions to resident lotto  receivers or agents

10

On account

Supply of goods exceeding GH₵ 2,000 p.a

 

3

On account

 

Supply of works

5

On account

Supply of services

15

On account

Lottery winnings

5

Final

Payment to petroleum subcontractor

15

Final

Payment for unprocessed precious minerals

10

On account

Royalty, natural resource payment

15

On account

 

Interest or dividend paid to a member or a holder of an approved unit trust or mutual fund

1

Final

Interest or dividend paid or credited to a person on a qualifying investment in a qualifying venture capital financing company for the first 10 years

1

Final

 

3.             The threshold for withholding tax for the supply of goods, works and services

                has been increased from GH₵500 to GH₵2,000.

The effective date of implementation of the Income Tax Act, 2015 (Act 896) is 1st January, 2016.

 

COMMISSIONER-GENERAL

 

GRA - INTEGRITY FAIRNESS SERVICE

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Contact Us

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Tel: +233- (0) 302 675701-9/684363-686106/684363

Fax: +233- (0) 302 681163/664938

 

 

 

 

 

 

 

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