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Domestic Tax News

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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Rates of Income Tax Contained in Income Tax Act, 2015 (Act 896)

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

 

Rates of Income Tax contained in the Income Tax Act, 2015 (Act 896) for compliance. 

 

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

 

                 Rates of Income Tax Contained in Income Tax Act, 2015 (Act 896)

Entity

Rate of Tax %

Corporate income tax

25%

Company principally engaged in the hotel industry

22

Company income from the export of non-traditional goods

8

Chargeable income derived by a financial institution from loan granted to a farming enterprise in the production of income of the enterprise

20

Chargeable income derived by a financial institution from loan granted to a leasing company to fund acquisition of assets for lease

20

Manufacturing business located in regional capitals (except Accra & Tema)

75% of corporate tax rate

Manufacturing business located outside the Regional capitals

50% of corporate tax rate

Free zone enterprise/developers for the first ten (10) years in operation

0

Free zone enterprise/developers after 10 years in operation (on export of goods and services)

15

Free zone enterprise/developers after 10 years in operation (on domestic sales)

25

Chargeable income of a person from petroleum operations

35

Chargeable income of a person from mineral operations

35

 

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

 

APPROVED UNIT TRUST AND MUTUAL FUND

 

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

1

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

1

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

1

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

Resident Individual

Graduated rates provided in the First Schedule

Non-resident Individual

20

Gain on realisation of investment asset by an individual

15

 

 

 

 

 

 

 

 

 

 

 

WITHHOLDING TAX

Withholding tax is deductible from payment for supply of goods and services, and other payments as follows:

INCOME

RATE (%)

COMMENTS

Resident Persons

 

 

Interest (excluding individuals and resident financial institutions)

8

 

On Account

Interest paid to Individual

1

On Account

  

Dividend

8

Final tax

Rent of residential property (for individuals and as investment income)

8

Final tax

Rent of non-residential property

15

Final tax

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

 

 

Non-Resident Persons

Income of non-resident individual from employment

20

Final

Dividend

8

Final tax

Royalties, natural resources payments and rents

15

Final tax

Management, consulting and technical service fee and endorsement

20

Final tax

Repatriated Branch after tax profits

8

Final tax

Interest income

8

Final tax

Short term insurance premium

5

Final tax

Endorsement fees

20

Final tax

Payment for services

20

Final tax

Goods, works and services that give rise to income accruing in or derived from Ghana (that is trading in Ghana (i.e. where a Permanent Establishment exists) as against with Ghana)

20

Final tax

Petroleum sub-contractor

15%

Final

 

Payments received by a person who conducts a relevant transport business as payment for

 

(i)  carrying passengers, cargo, mail or other movable tangible assets that are embarked in the country, other than as a result of transhipment; or

(ii)   renting containers and related equipment which are supplementary or incidental to the business referred to in subparagraph (i);

 

15%

Final

Payments received by a person who conducts a business of transmitting or receiving messages by cable, radio, optical fibre or satellite or electronic communication in respect of the transmission, reception or emission of messages by an apparatus located in the country, whether or not the messages originate, terminate or are used in the country;

 

15%

Final

 

COMMISSIONER-GENERAL

 

GRA - INTEGRITY FAIRNESS SERVICE

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

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

 

 

 

 

 

 

 

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