Taxes
The government has introduced more than 10 new and amended taxes since assuming office in 2017.
Notably among them is the Electronic Transfer Levy (E-Levy) introduced in 2022 that generated huge controversy. The Electronic Transfer Levy Act, 2022 (Act 1075) imposes a levy of 1% on all electronic transfers.
Majority of these taxes were introduced post Covid-19 pandemic to shore up the revenue base of the country.
However, they have increased the cost of living and cost of operations of businesses. Some businesses, Joy Business understands are spending more than 50% of their revenue on taxes.
Some old taxes have also been amended to what government describes broadening the tax net and boosting tax revenue.
However, there is the Penalty and Interest Waiver Act 2021, Act (Act 1065) that grant a waiver of penalties and interests on accumulated tax arrears up to December 2020 for persons who make arrangements.
During the week, Parliament passed three new laws and amended two existing laws, awaiting President Akufo-Addo’s assent for its implementation.
Some economists and market watchers have described the new taxes as unnecessary since it will overburden and worsen operations of businesses.
The Joint Business Consultative Forum including the Ghana National Chamber of Commerce and Industry, the Food and Beverages Association and the Association of Ghana Industries has also petitioned President Akufo-Addo on the passage of the three revenue tax amended bills.
According to the business groups, the implementation of these taxes will spell doom for the Ghanaian Business Community, hence the need to review the taxes.
Below are the taxes
1.Covid-19 Health Recovery Levy Act, 2021 (Act 1068)
The Covid-19 Health recovery Levy Act, 2021 imposes a 1% Covid-19 Health Recovery Levy against the backdrop of spending emanating from the Covid-19 Pandemic.
This applies to both imports and domestic supply of goods and services.
2. Financial Sector Recovery Levy Act, 2021 (Act 1067)
The Financial Sector Recovery Levy imposes 5% levy on the profit before tax of a bank.
The objective is to raise revenue to support the financial sector reforms and to provide for related matters.
3. Income Tax (Amended) Act, 2021 (Act 1061)
The Income Tax Act, 2015 (Act 896) provides for a rebate for selected industrial sectors, suspend quarterly instalment payments by specified self-employed persons and owners of commercial vehicles and for related matters.
4. Energy Sector Levy (Amended) Act, 2021 (Act 1064)
The Energy Sector Levy (Amended) Act, 2021 provide for an Energy Sector Recovery Levy and Sanitation and Pollution Levy to be imposed on specified petroleum products and for related matters.
It was assented by President Akufo-Addo on March 31, 2021.
Per the levy, a rate of 20 Ghana pesewas per litre on petrol and diesel and 18 Ghana pesewas per kilogramme of Liquefied Petroleum Gas (LPG) are to be charged.
5. Growth and Sustaniability Levy, 2022
The Growth and Sustaianbility Levy replaced the National Fiscal Stabilisation Levy that currently imposes a levy on companies operating in selected sectors. It is also projected to raise about ¢2.2 billion.
6. Excise Duty (Amendment) Levy, 2022
The Excise Duty (Amendment) Bill, will imposes a 20% tax on cigarettes and e-smoking devices, as well as sweetened beverages, spirits and wines. It is projected to rake in about ¢400 million annually,
7. Income Tax (Amendment) Bill 2022
The Income Tax (Amendment) Bill, 2022 is to amend the Income Tax Act, 2015 (Act 896) in order to revise the rates of income tax for individuals and introduce an additional income tax bracket, introduce a withholding tax rate on the realisation of assets and liabilities and on winnings from lottery, unify the loss carried forward provisions and revise the treatment of foreign exchange losses.
8. Withholding Tax on Realisation of Assets and Liabilities
A new withholding tax of 3% (for residents) and 10% (for non-residents) applies on the consideration received on realisation of assets and liabilities
9. Changes in Motor Vehicle Benefit for Employees
Employees who receive motor vehicle benefits will see an increase in the taxable cap. The ¢600 cap is now ¢1,500, the ¢500 cap is now ¢1,250 and the ¢250 cap is now ¢625.
However, unrealised foreign exchange losses are not deductible. Again, resident person-to-resident person transaction-related foreign exchange losses are not deductible.
10. Withholding Tax on Winnings from Betting, Lottery and Games of Chance
This levy imposes 10% tax on earnings from lotteries, games of chance winnings and sports betting at the point of payout.
11. Value Added Tax (Amendment) Act, 2021 (Act 1072)
The Value Added Tax (Amendment) Act, 2021 (Act 1072) revised the application of the VAT flat rate scheme (VFRS). Consequently, the VAT was increased to 15%, from 12%.
The levy only cover retailers of goods with value of taxable supply not less than ¢200,000 but not more than ¢500,000 at the end of any period of 12 month.
12. GetFund (Amendment Act), 2018 ( Act 972)
Waiver
Penalty and Interest Waiver Act 2021, Act (Act 1065)
The Penalty and Interest Waiver Act 2021 is an act that grant a waiver of penalties and interests on accumulated tax arrears up to December 2020 for persons who make arrangements.
The main focus of the act was to provide a relief to taxpayers who have accumulated interests and penalties on principal tax liability up to December 2020 to file their returns and make payments on or before 31st December, 2021.
