MAJOR DEVELOPMENTS
The 1997 budget statement presented to parliament touched on the government intention to reintroduce the value-added tax into the country taxation system in January 1998 to broaden the tax base, and to enhance the revenue collection effort. To this end, the necessary legal processes will be set in motion towards the enactment of the appropriate law, and all possible measures will be taken to ensure a smooth implementation of the system.
Pending the reintroduction of the VAT, the coverage of the service tax act has been widened effective July 1, 1997, to cover 11 other services. However, the tax rate applicable to the 11 additional services is 10%.
INCOME TAXES ON CORPORATIONS
1. Rates
Except for companies taxed under the Petroleum Income Tax Law (see item 24) and the companies listed below, all companies are taxed at the rate of 35%.
Type of Company Rate of Tax
Companies engaged in nontraditional exports 8%
Companies in the hotel industry 25
Manufacturing companies located in regional capitals other than Accra and Tema 26.25
All other manufacturing companies 17.5
2. Local Income Taxes
None.
3. Capital Gains Taxes
Capital gains tax is levied on capital gains derived by a person or a company, whether resident or not, from the realization of the following chargeable assets: permanent or temporary buildings, land (other than agricultural land), shares and businesses, and business assets (including goodwill). Exemptions exist for the following:
q Capital gains arising as a result of mergers, amalgamations, and reorganizations of companies;
q Capital gains arising from the disposal of securities before November 2000 by companies listed on the Ghana Stock Exchange.Capital gains are taxed at the flat rate of 5% of the duly computed gains. Special rules apply if the sale proceeds were used partially or wholly to acquire a similar chargeable asset.
4. Branch Profits Taxes
A branch of a foreign company is taxed on its profits on the same basis and at the same tax rates as a resident corporation. The Commissioner of Internal Revenue has discretionary power to assess the branch by reference to the consolidated profits of the whole group of companies, both resident and nonresident, of which the branch is a part. However, where the Commissioner is satisfied with the results of the branch operating in Ghana, the chargeable income of the branch is computed without reference to the total consolidated profits of the whole group.
5. Foreign Tax Reliefs
A Ghanaian resident company may obtain relief under double taxation treaties. The reliefs may consist of tax credits, reduced rates, or exemptions.
8. Other Matters
If a loss results or if the chargeable income of a trade, vocation, or profession is lower than a minimum chargeable income,?which is 5% of the annual turnover, then tax is charged on the minimum income at the appropriate income tax rate (see item 1). Excepted from this rule are mining and farming concerns, businesses in their first five years of assessment, businesses granted a tax holiday, and businesses that have for a minimum period of ten consecutive years of assessment, or a lesser period for new businesses, maintained to the satisfaction of the Commissioner adequate books of account and have submitted reliable accounts for all those years.
INCOME TAXES ON INDIVIDUALS
9. Rates
Individuals resident in Ghana are liable to tax on their income accrued in or derived from, brought into, or received in Ghana. The incomes of a husband and wife are taxed separately. An individual chargeable income includes all fixed allowances or benefits paid in cash or given in kind, including entertainment, rent, accommodations, car/transport, utilities, and domestic servants, but excluding reimbursed expenses incurred solely for the benefit of the employer. An individual income for the year of assessment is the total income for that year of assessment. In the table below, the amounts relate to total income.
Chargeable Income
Tax on Percentage
Over Not Over Lower Amount on Excess
? 0 ? 522,000 ?
[1] [2] [3] [4] 下一页
