2010 TAX RATES

I. INDIVIDUAL TAX RATES
II. NATIONAL RECONSTRUCTION LEVY
III. CORPORATE TAX RATE

The Commissioner of Internal Revenue wishes to inform the general public particularly individuals and corporate taxpayers that the reduction in the tax rates contained in the 2006 budget statement are in force and still applicable in 2010.

I. ANNUAL INDIVIDUAL TAX RATES
The top marginal rate has been reduced to 25% for GH¢9,600 and above. Additionally, the income bands have been stretched as follows:

II. REDUCTION IN TAX RATES

    A. THE NATIONAL RECONSTRUCTION LEVY ( This was abolished in 2007)
    Class A Companies
    From 7.5% to 5.5 %

    Class B Companies
    From 5% to 2.5%

    Class C and all other companies
    NIL

    B. Corporate Tax Rate
        I. General Corporate Tax Rate                                                                  25%

        II. TAX RATES BY SECTOR                                                                        Rate

        A. Companies listed on the Ghana Stock Exchange                                      22%
        from January 2006

        B. Rural Banks (after 10 years Tax Holiday)                                                 8%

        C. Free Zone Enterprises/Developers ( after 10 years of operation)                 8%

        D. Manufacturing Companies                                                      

        i. Located in Accra/ Tema                                                                          25%

        ii. Located in all other Regional Capitals                                                 18.75%

        iii. Located outside Regional Capitals                                                     12.50%

        E. Hotel Industry                                                                                      22%

        

        F. Financial Institutions

        i. Income derived from loans granted to Farming enterprises                       20%

        ii. Income derived from loans granted to Leasing Companies                       20%

        G. Companies engaged in Non- Traditional Exports                                       8%

        H. AGRO PROCESSING COMPANIES

        i. Located in Accra/Tema (after 5 years tax holiday)                                    20%

        ii. Located in other Regional Capitals (excluding Tamale, Wa, Bolga)            10%

        iii. Located in Northern, Upper West and Upper East                                       Nil

        I. COMPANIES PRODUCING COCOA BY-PRODUCTS FROM                  RATE SAME
        COCOA WASTE (after 5 years tax holiday)                                 AS IN H ABOVE

    c. WITHHOLDING TAX RATES-FIRST SCHEDULE
    OF ACT 592 (AS AMENDED)

         I. WITHHOLDING TAXES - FINAL
                  
                                            TYPE                                                                                           RATE

        a. Dividends paid to a Resident Person                                                                      8%

        b. Fees to a resident part-time teacher, lecturer, examiner, examination
            invigilator or examination supervisor                                                                     10%

        c. Endorsement fees to a Resident Person for recommending a product, or
            to promote sales at the expense of competing product in electronic, print
           media or otherwise                                                                                              10%

        d. Dividends and interest paid to Non- Resident Person                                                8%

        e. Royalties, natural resource payment and rent to a Non- Resident Person                   10%

        f. Management and Technical Service fees to a Non- Resident Person                          15%

        g. Premiums paid to Non-Resident Insurers                                                                5%

        h.  Payment for goods and services to a Non-Resident without Permanent                     15%
            Establishment                  

        

        II. WITHHOLDING TAXES - ON ACCOUNT

                                            TYPE                                                                                          RATE

        a. Interest to a Resident Person other than an individual                                             8%

        b. Commission to a Resident Insurance, Sales or Canvassing Agent                            10%

        c. Fees, emoluments, benefits paid in cash or in kind to a resident Director,
            Manager or Board member of a company or body of persons who is
            not a full time employee of such company or body of persons                                10%

        d. Commission to a Resident Lotto Receiver or Agent                                                  5%     

        e. Payment for goods and services to a Non-Resident Person with
            permanent establishment.                                                                                 15%

        f. Payment for goods and services to a Resident Person                                              5%

    

    D. Individual Tax Rates

       1. Personal income tax on minimum wage has been abolished
       2. Tax rate for those whose incomes are marginally above the minimum wage shall be 2.5%.
       3. The top marginal rate is reduced to 25% for GH¢ 9600 and above. Additionally, the income bands have been are stretched as follows:

III. TAXATION OF OVERTIME INCOME

    1. Income for qualifying junior employee - GH¢ 9,600 (Annual)

    Tax rate for Overtime Income (monthly)

Add to salary and tax at rates prevailing to personal income tax rates

2. Overtime incomes Exceeding GH¢800 a month do not qualify for the concessionary rates in (1).

IV. EXPANSION OF CARRY-OVER LOSSES
The Carry-over losses incentive has been expanded to cover agro-processing, tourism (companies registered with the Ghana Tourist Board) and ICT industries (software) Operators in these sectors can now carry forward losses incurred for five years.

VI. TAX CREDIT FOR EMPLOYERS
Government proposes to establish an incentive for companies employing fresh graduates from our tertiary institutions to improve their access to the job market. The Credit will be allowed for all enterprises irrespective of their size of operations, as follows:

These incentives will be additional to the normal allowable expenses for wages and salaries.

The rates became effective from 1st January, 2010

All paymasters, accountants and finance officers are to take note and implement the reductions for the benefit of all.