Income Tax (Amendment) Act, 2021 (Act 1066)
Effective 1 April 2021, the government of Ghana, through this amendment, is initiating tax relief measures for taxpayers to help mitigate the devastating consequences COVID-19 has had on the public. This amendment is made to the Sixth Schedule of the Income Tax Act, 2015 (Act 896) as amended (ITA). Among the measures effected under the new provision are the following:
- A tax rebate of 30% on the income tax liability of individuals operating in specified sectors of the economy. These sectors are education, travel and tours, arts and entertainments, and accommodation and food. These rebates are to cover the second through to the fourth quarter of 2021.
- The suspension of quarterly income tax instalment for the second, third, and fourth quarters of 2021. This provision is applicable to specified categories of self-employed persons as listed in the Income Tax Regulation, 2016, (L.I 2244). These include:
- Category A (retail traders, bakeries, estates and accommodation agents, etc.).
- Category B (dressmakers, hairdressers, beauticians, artisans, etc.).
- Category C (auto technicians, corn and other millers, butchers, vulcanisers, etc.).
- The suspension of quarterly instalment payments of vehicle income tax (VIT) for primary commercial transport owners (i.e. taxis and trotros) for the second, third, and fourth quarters of 2021.
The enjoyment of the above relief is contingent on the taxpayer being registered with the Ghana Revenue Authority (GRA) and fulfilling their obligation for the first quarter of 2021.