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Excise Duty

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Excise Duty

Excise duty is tax imposed on the manufacture, sale or consumption of some selected products such as alcoholic drinks, tobacco products and petroleum products. It is also imposed on imported products to compensate for the internal levy on goods of like nature.

Excise duty is a single stage tax and it is paid once either by the manufacturer or importer when the goods are removed, loaded onto a conveyance at the factory gate in Ghana or at the point of entry.

Imposition of Excise Duty

Section 1 of Excise Duty Act, 2014 (Act 878) states that Excise duty is payable on the goods specified in the first schedule where the goods are:
  • Manufactured in the country or
  • Imported into the country
  • at the rates specified in the first schedule.

Scope and Coverage

Excise duty is currently imposed on excisable goods delivered for consumption in Ghana and includes: (Please refer to the First schedule indicated as Appendix 1)

Registration of Manufacturers (for Excise Duty)

Section 14 of Excise Duty Act, 2014 (Act 878) states that a person shall not carry on a business of manufacturing excisable goods in the country unless
  • That person is registered under this Act
  • The excisable goods are manufactured in a warehouse; and
  • That person has entered into a general bond or lodged a form of security with the Commissioner-General.

Ghana Revenue Authority registers Manufacturers as well as Alcohol Stockists.

Eligibility Requirements for Registration

To be registered as an Excise duty payer, persons are required:
  • Not to have been convicted of an offence under the Excise Duty Act, 2014 (Act 878)
  • Not to be less than 18 years of age
  • Not to have had his/her certificate of registration cancelled under the Excise Duty Act, 2014 (Act 878)
  • To have a valid Taxpayer Identification Number
  • To be registered with the Registrar General’s Department
  • To be registered with the Ghana Revenue Authority before the commencement of the business
  • To have the materials to be used and products to be manufactured to be declared and registered with the relevant regulatory bodies such as the Food and Drugs Authority, the Ghana Standards Authority etc. (NB: The nature of the product determines the proper excise treatment e.g. the duty rate to apply)

Application for Registration

Section 15, Excise Duty Act 2016, (Act 878) stipulates the process for registering as an Excise duty payer as follows:
  • A person who intends to carry on a business of manufacturing excisable goods in the country shall, not later than Thirty (30) days before commencement of the business, apply to the Commissioner-General to be registered under this Act.
  • On receipt of an application, the Commissioner-General shall notify the applicant in writing of the decision of the Commissioner-General within Thirty (30) days.
  • The Commissioner-General
    • shall register the applicant if the Commissioner-General is satisfied that the applicant will be carrying on the business of manufacturing excisable goods in the country
    • shall issue the applicant with a certificate of registration; and
    • may impose the terms, conditions or restrictions that the Commissioner-General considers appropriate

Alcohol Stockist

Regulation 12, Excise Duty Regulations, 2016 (L.I 2242) defines an Alcohol Stockist also known as a Stockist as a person (individual, partnership or a company) registered or authorized by the Commissioner-General to purchase ethyl alcohol in bulk in its raw state and sell.

Types of Stockists

  • An importer who supplies ethyl alcohol directly to manufacturers of alcoholic beverages or to other stockists
  • A dealer who buys ethyl alcohol in large quantities from importers or other stockists and supplies to manufacturers of alcoholic beverages or other stockists

Obligations of Manufacturers (for Excise Duty)

Obligations of an Excise duty payer under the Excise Duty Act 2014, (Act 878) are as follows:
  • Manufacturers and importers of excisable goods are mandated to pay Excise duty on those goods at the rate specified in the first schedule of the Excise Duty Act 878
  • Manufacturers of excisable products must register under the Excise Duty Act, 2014 (Act 878), and charge the tax
  • Manufacturers of excisable goods must manufacture those goods in a manufacturing premises approved by the Commissioner General
  • Manufacturers of excisable goods are required to enter into a general bond or lodge security on excisable goods with the Commissioner General
  • A registered excise duty payer must comply with all relevant provisions in the Excise Duty Act, 2014 (Act 878)
  • Manufacturers of excisable goods are required to notify the Commissioner General about changes in any relevant events (name, address, place of business, constitution, or nature of principal activity of the manufacturer) or goods (nature or quantity of excisable goods manufactured or price) in the activity of the manufacturer
  • Manufacturers of excisable products are obliged to provide resident excise officers with office accommodation at or within the warehouse
  • Excise duty payers are required to file Excise duty returns for each calendar month by the 21st day of the following calendar month, whether or not Excise duty is payable during the return month
  • Manufacturers of excisable goods are required to pay Excise duty on goods entered for home use in a calendar month by the 21st day of the following month
  • Excise duty payers are required to maintain necessary records to enable verification of duty payable and accuracy of returns filed

Obligations of Stockists

A stockist is oblige under the Excise Duty Act, 2014 (Act 878) to:
  • Pay all duties and taxes in full at the time of import
  • Make accurate declarations of imports to the Ghana Revenue Authority at importation
  • Issue the Commissioner-General’s invoices for all sales
  • Keep proper books of accounts on their operations
  • Submit monthly stockist returns on sales and stocks
  • Submit accurate VAT/NHIL & GETFund returns and pay accurate taxes thereof
  • Sell to only registered stockists, registered blenders and manufacturers and in all other instances with clearance from the Excise unit of the Ghana Revenue Authority

Resident Officers (Section 24 Excise duty Act 2014, (Act 878))

The Commissioner-General may station an officer in a warehouse to ensure compliance with the Excise Duty Act.

The manufacturer shall provide the officer with the appropriate office accommodation at or within the warehouse to the satisfaction of the Commissioner -General.

Objectives:

The objectives of the resident officer are as follows:
Officers are stationed at the manufacturers’ premises
  • To monitor their activities and ensure maximum revenue yield
  • To check tax evasion
  • To reduce audit effort

Appendix 1: Goods Liable to Excise Duty

First Schedule: Excise Duty Act, 2014 (Act 878)

Tariff Number

Tariff Description Duty Rate

1

a) Waters, including mineral water of all description

17.5% of the ex-factory price

 

b) Distilled, bottled water

17.5% of the ex-factory price

c) Sachet water

0%

2

Malt drink; % use of local raw material

 

a) Less than 50% of local raw material

17.5% of the ex-factory price

 

b) 50% to 70% of local raw material

10% of the ex-factory price

c) Above 70% of local raw material

7.5% of the ex-factory price

3

Beer, stout other than indigenous beer; % use of local raw material

 

a) Less than 50% of local raw material

47.5% of the ex-factory price

 

b) 50% to 70% of local raw material

32.5% of the ex-factory price

 

c) Above 70% of local raw material

10% of the ex-factory price

 

4

 

Wines including sparkling wine

22.5% of the ex-factory price

5

Spirits including “Akpeteshie”:

 

a) Distilled or rectified

25% of the ex-factory price

b) Blended or compounded

25% of the ex-factory price

c) Other:

 

          i) For use solely in laboratories or in the compounding of drugs

0%

          ii) Denatured to the satisfaction of the Commissioner-General

10% of the ex-factory price

          iii) “Akpeteshie”

20% of the ex-factory price

6

Tobacco Products:

 

a) cigarette

175% of the ex-factory price

b) cigars

175% of the ex-factory price

c) Negrohead

GH₵ 12/kg

d) Snuff and other tobacco

170.65% of the ex-factory price

7

Plastic and Plastic products listed under Chapters 39 and 63 of the Harmonised System and Custom Tariff Schedules, 2012

10% of the ex-factory price

8

Other Products;

 

a) Textiles

0%

b) Pharmaceuticals

0%

9

Cider beer

17.5% of the ex-factory price

Exemptions from Excise Duty (Sect. 2 Of Excise Duty Act, 2014 (Act 878)

Excise duty is not payable on:

  • Goods specified in the Second Schedule of Excise Duty Act, 2014 (Act 878)
  • Goods that have not been entered for home use from the warehouse of a manufacturer where the Commissioner General is satisfied that the goods:
    • have been destroyed by natural causes

    • have deteriorated or been damaged while stored in the warehouse of a manufacturer and have been securely disposed of to the satisfaction of the Commissioner General

  • Goods that are exported if the goods are:

    • entered for re-export or re-exported in the case of imported goods

    • removed from a warehouse and immediately entered for export in the case of locally produced goods
    • delivered as ship stores on a ship or aircraft proceeding to a place outside Ghana

  • Goods that are removed from a warehouse of a registered manufacturer to another warehouse of the same manufacturer or to the warehouse of another registered manufacturer.

    (Please refer to the Second Schedule indicated as Appendix 2 below)

Appendix 2: Exemptions from Excise Duty

Second Schedule: Excise Duty Act, 2014 (Act 878)

Tariff Number Commodity Description Rate of Duty
2.1

The President of the Republic of Ghana:

All Goods purchased from a manufacturer for the use of the President of Ghana

0%
2.2

Government of Ghana contracts where the contract is duly approved by the President:

All goods purchased from a manufacturer by a person under contract to the government where such exemption from excise duty forms part of the terms of the contract

0%
2.3

Licensed manufacturers:

All goods purchased by a manufacturer licensed under this Act for the purpose of manufacturing excisable goods

0%
2.4

Diplomatic missions:

a) All goods purchased for the official use of any Commonwealth or Foreign Embassy, Mission or Consulate.

b) All goods purchased for the use of a permanent member of a Diplomatic Service of any Commonwealth or Foreign country, exempted by the Minister responsible for Foreign Affairs

Where with reference to a) and b) above, a similar privilege is accorded by the Commonwealth or Foreign Country to the Ghana representative in the country

c) All goods purchased by personnel engaged by an International Agency or in a Technical Assistance Scheme where the Terms of Agreement made with the Government of Ghana include exemption from excise duty and duly approved by Parliament.

0%
2.5

Non-domestic goods:

All goods re-exported

0%

 

Offences and Penalties

Sections of the Act Offences Penalty
Offences and Penalties Under the Excise Duty Act, 2014 (Act 878)
26 Failure to register under the Excise duty Act, 2014 (Act 878) The CG may register the person and a certificate of registration issued to the person.
27 Manufacturing and storing excisable goods at or removing excisable goods from premises not approved by the Commissioner General

The person shall pay an administrative penalty of two times the duty payable on the goods, and

commits an offence and is liable, on summary conviction, to a fine of not more than three times the excise duty payable on the goods, or

to imprisonment for not more than one year or both

28 Entering excisable goods for home use without having a bond or security as stated in S.28 or entering goods for home use without complying with S.7(4) of the Excise Duty Act

The person is liable, on summary conviction, to a fine of not more than two times the duty payable, or to imprisonment for not more than one year or both (S.28(1))

 

In addition to the above penalty; the person shall pay a penalty equal to two times the duty payable on the goods during the time that no bond or security existed or

two times the duty payable on each non-compliant entry of goods for home use that does not comply with S.7(4).

29 Failure to notify the Commissioner General about changes in any relevant events (name, address, place of business, constitution, or nature of principal activity of the manufacturer) or goods (nature or quantity of excisable goods manufactured) in the activity of the manufacturer.

 The person is liable, on summary conviction to a fine of not more than 200 hundred penalty units for each failure or to imprisonment for not more than six months, or both.

 

In addition to the above penalty, the manufacturer shall pay a penalty of not more than 500 currency points for each failure.

30 Failure to provide office accommodation to resident excise officers The manufacturer shall pay administrative penalty of not more than 500 currency points for each day that the manufacturer fails to provide the required accommodation
31 Failure to submit an excise duty return by the due date The manufacturer is liable to a penalty of 500 currency points and a further penalty of 10 currency points for each day that the failure continues
32 Failure to make Excise duty payment on manufactured excisable goods by the due date The manufacturer is liable to pay a penalty of 15% of the amount due and interest of 5% of the amount due for each day that the failure continues
Offences and Penalties Under the Excise Tax Stamp Act 2013 (Act 873)
15 Failure to affix specified excisable goods with the Excise tax stamp before they are put on sale or released for sale

The Authority shall seize the product in accordance with Section 124 and Section 125 of the Customs Act, 2015 (Act 891).

 

The person is liable to summary conviction, to a fine of not more than 300% of the duties and taxes payable on the unstamped excisable goods, or imprisonment for not more than 5 years, or both.

 

Along with the above fine and imprisonment penalties, goods connected to the offence shall also be forfeited to the state.

16 Making an impression, altering, counterfeiting or performing an act, in the matter of the Excise tax stamp, with the intent of evading any duty or tax

The person is liable to summary conviction, to a fine of not more than 300% of the duties and taxes payable on the unstamped excisable goods, or imprisonment for not more than 5 years, or both.

 

Along with the above fine and imprisonment penalties, goods connected to the offence shall also be forfeited to the state.

The Legislative Framework Governing Excise duty administration in Ghana are:

  • The Excise Duty Act, 2014 (Act 878) – Primary authority for Excise
  • The Excise Tax Stamp Act, 2013 (Act 873) – Stamping Administration
  • The Customs Act, 2016 (Act 891) – Valuation, Import and Seizure Provisions
  • The Revenue Administration Act, 2016 (Act 915) – General supporting provisions for all taxation statutes
  • Excise Duty Regulations, 2016 (L.I.2242)
  • Excise Tax Stamp Regulations, 2016 (L.I. 2241)
  • Practice notes
  • Other legislative instruments and related directives
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