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GUIDELINES FOR THE IMPLEMENTATION OF TAX INCENTIVES IN SUPPORT OF TAXPAYERS AGAINST THE COVID-19 PANDEMIC

MAY 05, 2020

  • 1.0    INTRODUCTION

    These guidelines are to provide the framework for the smooth application of tax incentives announced by Government in the wake of the COVID-19 pandemic to:

    1. Personal emoluments of Health Workers;
    2. Additional allowances of frontline Health Workers;
    3. Persons who make withdrawals from Provident Funds or personal pension schemes as a result of permanent loss of employment or capital due to the COVID-19; and
    4. Donations made towards the fight against the pandemic.

PART ONE

  • WAIVER OF INCOME TAX ON PERSONAL EMOLUMENTS OF HEALTH WORKERS FROM APRIL TO JUNE 2020

    1. SCOPE OF BENEFICIARIES

    Section 7(4) of the Income Tax Act, 2015 (Act 896) under which the Parliamentary approval was granted requires that the tax liability (exempt amount) be known before the waiver can be granted. The beneficiary institutions should therefore provide the information below to their respective tax offices to obtain certification and approval to grant the waiver.

    The waiver covers the following categories of health workers:

    • Category 1: staff of Public Sector Health Facilities on the centralised payroll administered by the Controller and Accountant General – information on this category will be furnished by the Controller and Accountant General (CAG),
    • Category 2: staff of subvented Quasi- Government Health Facilities – information on this category will be furnished through the CAG/Ministry of Finance,
    • Category 3: staff of public Health Facilities paid through Internally Generated Funds (IGF),
    • Category 4: staff of Self-Accounting Quasi- Government Health Facilities; and
    • Category 5: staff of Private Sector Health Facilities duly registered by the Ministry of Health

    All other health workers not captured under the above categories are excluded from the incentives.

    • SCOPE OF INCENTIVES

    The waiver covers personal emoluments of health workers as stated on their pay slips. Other benefits, including bonuses, sitting allowances and honoraria are excluded from the waiver.  

    • REQUIREMENTS FOR QUALIFICATION TO DRAW THE INCENTIVES
    1. The beneficiary health institutions must be registered with the Ghana Revenue Authority (GRA) and discharging their tax obligations.
    2. Qualifying employees of such institutions must have Taxpayer Identification Numbers.
    3. Beneficiary institutions which fall under Categories 3 to 5 above are required to continue filing their PAYE returns at their respective tax offices, as they must have already been doing as part of their tax obligations.
  • WAIVER OF INCOME TAX ON ADDITIONAL ALLOWANCES PAID TO FRONTLINE HEALTH WORKERS FROM MARCH TO JUNE 2020

    1. SCOPE OF BENEFICIARIES

    The waiver is applicable only to health workers designated as Frontline by the Ministry of Health.

    • SCOPE OF INCENTIVES

    The waiver covers only the additional allowance constituting 50% of a frontline worker’s basic salary.

    • REQUIREMENTS FOR QUALIFICATION TO DRAW THE INCENTIVES

    The requirements under (I) above apply.

  • WAIVER OF INCOME TAX ON WITHDRAWALS FROM TIER THREE (3) PROVIDENT FUNDS AND PERSONAL PENSION SCHEMES BEFORE MATURITY AS A RESULT OF PERMANENT LOSS OF EMPLOYMENT OR CAPITAL

    An individual who makes withdrawals from their Tier three (3) Provident Funds or personal pension schemes before maturity as a result of permanent loss of employment or capital due to the COVID-19 pandemic shall be exempted from the income tax thereon.

    Eligibility for the waiver will however be determined by the National Pensions Regulatory Authority (NPRA) in the form of certification covering qualification for such withdrawals.

    Applicants are therefore required to show proof of their eligibility before the waiver is granted.

  • VAT/NHIL/GETFUND RELIEF ON DONATIONS TOWARD THE FIGHT AGAINST THE COVID-19 PANDEMIC

    1. SCOPE OF BENEFICIARIES

    The relief mainly covers the following categories of beneficiaries:

    1. Businesses/persons who donate some of their stock of goods or equipment,
    2. Businesses/persons/associations who purchase items from third parties to donate, and
    3. Businesses/persons who purchase inputs for the construction or extension of health facilities meant for the fight against the pandemic

    The underlying supplies must have, however, been donated through recognized institutions and bodies including the following:

    • The COVID-19 Trust Fund,
    • The Private Sector COVID-19 Fund,
    • Metropolitan, Municipal and District Assemblies (MMDAs),
    • Ministries, Departments and Agencies (MDAs),
    • Health institutions,
    • Traditional Councils,
    • Religious bodies/institutions.
    • REQUIREMENTS FOR GIVING EFFECT TO THE TITLE TO RELIEF
    •  Beneficiaries in categories (a) and (b) above are to obtain proof of donations in the form of acknowledgment of receipt   of donations from the qualifying institutions listed under (1) above
    •  Correspondence acknowledging receipt should indicate the name of the donor, the description of the items donated, the respective quantities and value donated
    •  
    • Beneficiaries should attach copies of such correspondence to the monthly VAT/NHIL/GETFund levy returns when filing them.

    TREATMENT

    • Beneficiaries under category (a) above are to take the relief so conferred on their monthly VAT/NHIL/GETFund levy returns which should be accompanied by copies of correspondence acknowledging receipt of donations as indicated above.
    • Those in category (b) are to take the relief as deductible expenses in filing their income tax returns
    • Category (c) beneficiaries are to obtain approvals for imports of the underlying supplies from the Ministry of Finance on consignment basis, and obtain their relief by application through the Exemptions Portal
    • On the domestic front, category (c) beneficiaries are to apply to the GRA for the one-off VAT Relief Purchase Order (VRPO) dispensation subject to Ministry of Finance approvals

    NOTE: For (iii) and (iv) above, the beneficiary should apply through the Ministry of Health to validate their application and forward same to the Ministry of Finance for approval

PART TWO

  • Scope of Part Two

    • DONATIONS IN SUPPORT OF COVID 19 PANDEMIC
    • Donations and contributions made toward fighting the COVID-19 pandemic shall be allowed as deductible expense.
    • SCOPE OF THE ALLOWABLE DEDUCTION

    All persons who make donations towards the COVID-19 pandemic shall be eligible.

    • ELIGIBILITY CRITERIA
    1. Submit your annual tax returns
    2. Attach evidence of such donation(s) (i.e. the acknowledgement of receipts)
    3. Attach any other document that you may deem necessary in support of the claim
    • WAIVER OF PENALTIES TO TAXPAYERS AS A RESULT OF COVID-19 PANDEMIC

    Persons who settle all outstanding tax liabilities on or before 30th June 2020 shall be eligible for a remission of penalties as part of incentives towards the COVID-19 Pandemic.

    • PROCEDURE FOR THE APPLICATION FOR THE WAIVER

    Persons who have settled all outstanding tax liabilities shall follow the steps below in applying for the waiver.

    1. Apply to the Commissioner-General in writing, stating the amount of penalties involved and the period(s) they relate to.
    2. Attach evidence of  payment(s) made