Taxes in Ghana
If you are an established business operating in Ghana, one of your key obligations is to pay your taxes. Calculating taxes can be tedious, even more so if you are not sure about the rates and percentages. But the big deal here is that you still have to pay them. Hence, you should know the various taxes to pay and the rates.
This article details everything you need to know about tax registration, tax rates, tax incentives, withholding taxes, income taxes, monthly tax filings, and audits in Ghana. Learn more from these guidelines that will help you comply with all tax requirements in Ghana.
- All businesses are required to register with the Ghana Revenue Authority (GRA).
- Businesses exempted from corporate tax are still required to register their business with the GRA to pay income tax.
- All businesses registering with the GRA, must do so at the nearest GRA district office closest to the project location.
- To register your company with the GRA, the following documents are required;
- Completed corporate tax registration forms
- VAT registration forms (If Applicable)
- Resume of all directors of the company
- Pictorial delineation of the project/office location
- A provisional tax assessment is raised on all businesses yearly, including new business registrations.
- For new business tax registration, provisional tax assessment is determined by the GRA office in consideration of the objects of the business, stated capital and the nationality of the shareholders.
- All companies liable for tax in Ghana are required to pay provisional tax quarterly.
Tax Rates and Incentives
Annual income tax rates (Effective January 2022) – Find below
Monthly income tax rates (Effective January 2022) – Find below
- Reliefs in the fifth Schedule have been revised as follows:
A relief is an allowance given to a resident individual to reduce his or her tax burden.
|Type Of Reliefs||Current Relief GH₵|
|Marriage / Responsibility||1,200 per Year|
|Old Age (Granted persons age 60 years and above)||1,500 per Year|
|Child Education (Granted for a maximum of 3 children enrolled in recognised registered educational institutions in the country).||600 per Child per Year|
|Aged Dependant Relative (Granted for up to two (2) dependant relatives of 60 years or more.||1,000 per Year|
|Professional Training Relief||2,000 per Year|
- The general Corporate Income Tax rate is 25%. However, contemporary rates are depending on the nature of business carried out by an entity, the location of the business and the specific industry in which it operates.
|Income of a Trust||25|
|Company principally engaged in the hotel industry||22|
|Company engaged in the export of non-traditional exports||8|
|Financial institutions from loans granted to farming enterprises||20|
|Financial institutions from loans granted to a leasing company||20|
|Manufacturing companies located in regional capitals (except Accra & Tema)||18.5|
|Manufacturing companies located outside Accra, Tema and the regional capitals||12.5|
|Free Zone Enterprises after 10 years tax holiday (on domestic sales)||25|
|Free Zone Enterprises after 10 years tax holiday (on the export of goods and services)||15|
|Petroleum income tax||35|
|Mineral income tax||35|
All companies are required to file their monthly and annual tax returns.
- VAT – 30th of the month
- Income tax (PAYE) – 15th of the month
- Withholding tax – 15th of the month
- Annual audited financial statement – not later than 30th April of the year.
Penalty for late filing of tax returns are
- VAT – After the last working day, you will pay Ghc500. Any additional day is Gh₵10.
- Withholding tax – After 15th you pay Gh₵500. Any additional day is Gh₵10
- Income tax – After each quarter (March, June, September, December), you pay Gh₵500. Any additional day is Gh₵ 10.
- Annual financial statements – After the last working day of April, you will pay Gh₵500. Any additional day is Gh₵10.
From time to time, the GRA may initiate a company audit. In that audit, the company will have to supply the following relevant company source documents;
- VAT invoice books
- Copies of VAT monthly filings
- Bank statements
- PAYE receipts
- Sales books
- Copies of payment receipts for general and operational expenses
- Custom import documents as evidence for importation
- Asset register
- Trial balance
During an audit, the tax officers typically assess whether the source documents agree with the audited financial statement that has been submitted to the GRA. Specifically;
- VAT invoices must agree with the Monthly VAT filings
- Monthly VAT filings must agree with the reported Annual turnover figure in the financial statement
- The annual turnover figure must correspond with the company’s sales book and bank statement sales deposits.
- The expenses in the Profit and Loss statement must be traced to the cash book, with supported payment receipts accordingly
- The salaries and wages figure in the Profit and Loss tally with the PAYE filings
- All acquisitions of new assets must be evidenced by appropriate receipts and the asset register, and shown in the balance sheet as well.
Withholding taxes in Ghana
- The following incomes are subject to withholding tax at the rates specified in the table below;
|Interest (excluding individuals and resident financial institutions)||8|
|Rent on residential properties||8|
|Rent on non-residential properties||15|
|Fees to resident individuals as invigilators, examiners and part-time teachers or lecturers, and endorsement fees to individuals||10|
|Fees or allowances to directors, managers, board members and trustees who are resident individuals||20|
|Commission to insurance, sales, canvassing and lotto agents who are individuals||10|
|Supply of services by an entity exceeding GH¢2,000 per annum||7.5|
|Supply of general services by an individual||7.5|
|Supply of goods exceeding GH¢2,000 per annum||3|
|Supply of works exceeding GH¢2,000 per annum||5|
|Payments to petroleum subcontractors||7.5|
|Payments for unprocessed precious minerals||3|
|Royalty, natural resource payments||15|
|Management and technical service fees||20|
|Goods, works or any services||20|
|Royalties, natural resources payments and rents||15|
|Income from telecommunication and transportation business||15|
|Payments to petroleum subcontractors||15|
|Repatriated branch after tax profits||8|
|Interest income (excluding individuals)||8|
|General insurance premiums||5|
Excise tax stamp
The Excise Tax Stamp is a specially designed stamp with digital and other security features which is affixed on excisable goods to show that taxes and duties have been paid or would be paid. The stamp is affixed on specified excisable goods in Ghana whether locally manufactured or imported.
Products that Attract Excise Tax Stamp
- Cigarettes and other tobacco products;
- Alcoholic beverages bottled, canned, contained in kegs for sale or packaged in any other form;
- Non-alcoholic carbonated beverages bottled, canned or packaged in any other form.
- Bottled Water etc.
- Any other excisable product prescribed by the Finance Minister.
|Value Added Tax|
|Taxable Supplies||Standard Rate||15%|
|Taxable Supplies||Retailers and Wholesalers||3%|
|National Health Insurance Levy|
|Taxable Supplies||Standard Rate||2.5%|
|Ghana Education Trust Fund Levy|
|Taxable Supplies||Standard Rate||2.5%|
|Taxable Supplies||Standard Rate||1%|
Illustration (Calculating VAT)
Value of Taxable Supplies = Ghc 12,000
NHIL = Ghc 12,000 * 2.5% = Ghc 300
GETFL = Ghc 12,000 * 2.5% = Ghc 300
COVID-19 LEVY = Ghc 12,000 * 1% = Ghc 120
Subtotal Ghc 12,720.00
VAT = Ghc 12,720 * 15% = Ghc 1,908.00
Total Amount to be paid to GRA = NHIL + GETFL + VAT
= Ghc (300 + 300 + 120+ 1,908)
= Ghc 2,628.00