New Tax Rates, 2010
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. However, effective 9th June, 2010, new individual personal income tax rates have been introduced. The rates are shown below;
I. ANNUAL INDIVIDUAL TAX RATES
The top marginal rate has been reduced to 25% for GH¢16,200 and above. Additionally, the income bands have been stretched as follows:
|
CHARGEABLE INCOME |
RATE OF TAX |
|
|
|
GH¢ |
|
|
First |
1,008 |
Free |
|
Next |
240 |
5% |
|
" |
720 |
10% |
|
" |
14,232 |
17.5% |
|
Exceeding |
16,200 |
25% |
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)
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. The top marginal rate is reduced to 25% for GH¢ 16,200 and above. Additionally, the income
bands have been are stretched as follows:
|
CHARGEABLE INCOME |
RATE OF TAX |
|
|
|
GH¢ |
|
|
First |
1,008 |
Free |
|
Next |
240 |
5% |
|
" |
720 |
10% |
|
" |
14,232 |
17.5% |
|
Exceeding |
16,200 |
25% |
III. TAXATION OF OVERTIME INCOME
1. Income for qualifying junior employee - GH¢ 9,600 (Annual)
Tax rate for Overtime Income (monthly)
|
CHARGEABLE INCOME |
RATE OF TAX |
|
|
|
GH¢ |
|
|
First |
120 |
2.5% |
|
Between |
120 – 400 |
10% |
|
Over |
400 |
Add to salary and tax at rates prevailing to personal income tax rates |
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:
|
Percentage of Fresh Graduates in Workforce |
Proposed Incentive |
|
Up to 1% |
Up to 10 % of salaries/Wages of such employees |
|
1-5% |
30% |
|
Above 5% |
50% |
These incentives will be additional to the normal allowable expenses for wages and salaries.
The rates became effective from 9th June, 2010
All paymasters, accountants and finance officers are to take note and implement the reductions for the benefit of all.