Ghana

Corporate - Significant developments

Last reviewed - 06 February 2020

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 0% 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.

Abolishment of VAT on management fees for Private Equity, Venture Capital and Mutual Funds

To encourage the establishment of Private Equity, Venture Capital and Mutual Funds, which will improve the ecosystem for start-ups, the current application of VAT on management fees for these funds has been abolished with the passage of VAT(amendment) 2019, (Act 1005).

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. Manufacturers and importers of textiles are therefore required to affix the tax stamp on their products.

Initiatives

The 2020 budget has the following tax policies or initiatives proposed by the government to be undertaken during the year:

Direct taxes

  • Renewal and extension of National Fiscal Stabilisation Levy for five years.
  • Increase in the tax-free threshold to align with the new national daily minimum wage.
  • Upward adjustment in personal reliefs.
  • Review of current tax laws and incorporation of BEPS action point on Mandatory Disclosure Rules in legislation.

Indirect taxes

  • Renewal and extension of Special Import Levy for five years.
  • Abolishing the application of VAT on management fees of Private Equity, Venture Capital and Mutual Funds.
  • Review and strengthening of current legislation and regulatory framework for taxation of e-services and the digital economy

Tax administration

  • Restructuring the tax system and developing a comprehensive revenue policy and strategy.
  • Reforming the Ghana Revenue Authority for efficiency and productivity.
  • Passing the Revenue Administration Regulations and Transfer Pricing Regulations.