Ghana

Income Tax Amendments Act, 2023 (Act 1094)

The Parliament of Ghana passed Act 1094 to introduce the below amendments effective 1 May 2023:

Minimum chargeable income system

Tax is imposed on a minimum chargeable income of five percent of turnover where a person has been declaring tax losses for the previous five years of assessment. This excludes persons:

• within the first five years of commencement of operations; and
• engaged in farming.

Unification of the provision on carry-forward of tax losses

All taxpayers are allowed to carry forward tax losses from business for a period of five years. 

Restriction of foreign exchange loss deduction

The deductibility of foreign exchange loss in respect of debt claim, debt obligation or foreign currency holdings is limited to realised losses incurred in the production of income. Exchange losses on transactions with resident persons are also not deductible. Taxpayers are allowed to capitalise foreign exchange losses of a capital nature and claim capital allowance accordingly.

Realisation of assets and liabilities

A person who realises an asset or liability is required to file a return, in the form prescribed by the Commissioner-General of the Ghana Revenue Authority, within 30 days after the realisation. 

Qualifying consideration payments for the realisation of assets and liabilities will attract a withholding tax of three and ten percent for resident and non-resident persons respectively. 

Broader definition of controlled relationship

The scope of association of persons in a controlled relationship has been broadened by reducing the minimum control threshold to 25% direct or indirect control. This means that a person is an associate of an entity and deemed to be in a controlled relationship where the person has directly or indirectly at least 25% of the voting right of the entity. 

Increase in the income tax rate for persons entitled to temporary concessions

The income tax rate for persons entitled to concessions such as those engaged in the business of farming, agro-processing, cocoa by product, rural banking, waste processing, low cost housing, unit trust, mutual fund and venture capital financing has been increased to 5%. 

Taxation of lottery operations and winnings from lottery

The gross gaming revenue from lottery operations, including betting, gaming and any game of chance is taxed at an income tax rate of 20%. 

Payments in respect of winnings from lottery are subject to a final withholding tax rate of 10%. This is effective 15 August 2023.  

Increase in the upper limits of quantifiable motor vehicle benefits

The upper limit of motor vehicle benefits to be included in the employment tax computation has been increased as follows:

• Driver and vehicle with fuel - GHS1,500;
• Vehicle with fuel - GHS1,250; 
• Vehicle only - GHS625; and
• Fuel only - GHS625. 

Revision of the personal income tax bands and rates

The personal income tax bands and rates for individuals have been revised to align with the 2023 minimum daily wage. There is an introduction of an additional tax rate of 35% on income exceeding GHS600,000 per year. 

Growth and Sustainability Levy, 2023 (Act 1095)

Act 1095 repeals the National Fiscal Stabilisation Levy, 2013 (Act 862) and introduces the Growth and Sustainability Levy (GSL or levy). The GSL is payable by entities categorised into three groups as follows:  

• Category A- Existing National Fiscal Stabilisation Levy entities plus six additional sectors: 5% of profit before tax
• Category B- Mining companies and upstream oil and gas companies: 1% of gross production); and
• Category C- All other entities not falling within Category A or Category B: 2.5% of profit before tax. 

The levy is applicable for the 2023, 2024 and 2025 years of assessment. It is payable quarterly and due on 31 March, 30 June, 30 September and 31 December of the year. 

Excise Duty (Amendment) Act, 2023 (Act 1093)

Effective 1 May 2023, the excise tax rates for cigarettes and other tobacco products, wine, malt drinks and spirits have been revised upwards. In addition, excise duty has been imposed on sweetened beverages including fruit juices, and electronic cigarettes, electronic cigarette liquids, and electronic smoking devices.