Changes in higher tax rate introduced for resident individuals
The marginal individual income tax rate has been reduced from 35% to 30% effective 1 January 2019 with the passage of the Income Tax (Amendment)(No.2) Act, 2018 (Act 979). Act 979 revised the extra tax band of 35% for resident individuals with chargeable incomes of GHS 10,000 or more per month (GHS 120,000 or more per annum) to 30% for chargeable incomes of GHS 20,000 or more per month (GHS 240,000 or more per annum).
Changes in the Value Added Tax (VAT) rate for locally manufactured textiles
The Parliament of Ghana passed the Value Added Tax (Amendment)(No. 2) Act , 2018 (Act 980) to apply a VAT rate of zero percent on the supply of locally manufactured textiles up to 31 December 2021. The zero-rating is applicable on locally manufactured textiles by a local manufacturer who has been approved by the Minister responsible for Trade and Industry.
Excise Tax Stamp (Amendment) Act, 2018 (Act 981)
Act 981 includes textiles as goods to which excise Tax Stamp is to be affixed effective 1 January 2019. Manufactures and importers of textiles are therefore required to affix the Tax Stamp on their products.
The 2019 budget has the following tax policies or initiatives proposed by the government to be undertaken during the year:
- Shifting the tax collection point of small scale mining operators from withholding tax (WHT) to the point of export.
- Capitalising tax exemptions (expenditures) granted to mining companies to enable the government to secure additional equity holdings in such companies.
- Introducing tax incentives, such as tax holiday and exemption form import taxes, for government’s flagship programme for industrialisation, the One District One Factory initiative.
- Implementing the Economic Community of West African States (ECOWAS) Common External Tariff to address cross-border smuggling, combat dumping, and bring economic benefits to the sub-region.
- Introducing tax free solutions for full electric vehicles as a measure to protect the environment and in line with the government’s commitment to sustainable development goals.
- Intensifying tax compliance measures, such as prosecution of offenders, and implementation of the Fiscal Electronic Device Act and excise tax stamp policy.
- Reforming the Ghana Revenue Authority (GRA) and effecting changes aimed at boosting the GRA’s performance and enhancing the work ethic of its staff.
- Broadening the tax net through the use of third party data and enforcing tax identification number related laws.
- Deploying the National Builder’s Corps to aid in revenue mobilisation by identifying and registering potential taxpayers.
- Amending the tax exemption regime as a way of optimising benefits to the economy and ensuring undue loss of revenue.