Taxes in Ghana

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 which will help you comply with all tax requirements in Ghana.

Tax registration

1. All businesses are required to register with the Ghana Revenue Authority (GRA).
2. Businesses which are exempt from corporate tax are still required to register their business with the GRA for the purposes of payment of income tax.
3. All businesses registering with the GRA, must do so at the nearest GRA district office closest to the project location.
4. To register your company with the GRA, the following documents are required;

• Completed corporate tax registration forms
• VAT registration forms
• Resume of all directors of the company
• Pictorial delineation of the project/office location

5. A provisional tax assessment is raised on all businesses yearly, including new business registrations.
6. 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.
7. All companies liable for tax in Ghana, are required to pay provisional tax quarterly.

Tax Rates and Incentives

8. In Ghana the applicable taxes are;

• Corporate tax – 25%
• VAT and NHIL – 17.5%
• VAT Flat Rate Scheme (VFRS) – 3%
• Capital gains tax -15%
• Dividend tax – 25%
• Annual income tax rates – Find below

Chargeable Income (GH¢)	Rate (%)	Tax (GH¢)	Cumulative Chargeable Income (GH¢)	Cumulative Tax (GH¢)
First 2,592	Free	NIL	2,592.00	NIL
Next 1,296	5	64.80	3,888.00	64.80
Next 1,812	10	181.20	5,700.00	246.00
Next 33,180	17.5	5,806.50	38,880.00	6,052.50
Exceeding 38,880	25%

 

• Monthly income tax rates –Find below

Chargeable Income (GH¢)	Rate (%)	Tax (GH¢)	Cumulative Chargeable Income (GH¢)	Cumulative Tax (GH¢)
First 216	NIL	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	3240	504.38
Exceeding 3,240	25%

9. The following tax incentives (tax holidays and tax rebates) are available under the law;

Tax Rates	Percentage (%)
General Corporate Tax	25%
Companies Listed on the GSE	22%
Free Zone Enterprises	8% (After 10 year Tax Holiday)
Manufacturing Companies	25%
Companies Engaged in Non-Traditional Exports	8%
Companies Producing Cocoa By-Products	25%
Agro-Processing Companies	25% (after  1% for the 1St 5 years)
Venture Capital Financing Company	25% (after  1% for the 1St 10 years)
Unit Trust Scheme and Mutual Fund	25% (after  1% for the 1St 10 years)
Waste Processing	25% (after  1% for the 1St 10 years)
Companies Engaged in Non-Traditional Exports	8%

Withholding taxes in Ghana

10. 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	7.5	On account
Lottery winnings	5	Final
Payment to petroleum subcontractor	15	Final
Payment for unprocessed precious minerals	10	On account
Rent on Properties i.e Payment to an individual. Non –Business ·         Residential ·         Non -Residential	8 15	Final Final
Rent on Properties i.e Payment to persons other than individual Business Income -Residential -Non –Residential Non-Business Income -Residential -Non-Residential	8 15 8 15	On Account On Account Final Final
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

The threshold for withholding tax for the supply of goods, works and services have been increased from GH₵500 to GH₵2,000.

Tax filings

11. All companies are required to file their monthly and annual tax returns.

• VAT – 30^thof the month
• Income tax (PAYE) – 15^thof the month
• Withholding tax – 15^thof the month
• Annual audited financial statement – not late than 31^stMay of the year.

12. The penalty for late filing of tax returns are:

• VAT – After the last working day you will pay Gh₵500. Any additional day is Gh₵10.
• Withholding tax – After 15^th 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 last working day of April, you will pay Gh₵500. Any additional day is Gh₵10.

Tax audits

13. The GRA may from time to time initiate a company audit
14. In an audit, the company will be required to supply relevant company source documents including the following;

• VAT invoice books
• Copy of VAT monthly filings
• Bank statement
• PAYE receipts
• Cashbook
• Sales books
• Copies of payment receipts for general and operational expenses
• Custom import documents as evidence for importation
• Asset register
• Trial balance

14. 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 on the balance sheet as well.