Ghana Taxes for Individuals and Businesses

The Ghanaian tax system is a structured framework designed to generate revenue for national development and public services. It is administered by the Ghana Revenue Authority (GRA), the government agency responsible for assessing, collecting, and accounting for tax revenues. Understanding this system is important for any individual or business operating within Ghana.

Determining Tax Residency and Obligation

An individual’s or a company’s tax liability in Ghana is tied to their residency status. For individuals, residency is determined by a physical presence test. A person is considered a resident for tax purposes if they are present in Ghana for 183 days or more in any year of assessment.

For companies, residency criteria focus on the entity’s legal and operational base. A company is a resident for tax purposes if it is incorporated under the laws of Ghana or if its management and control are exercised in Ghana at any point during the year.

The distinction between residents and non-residents defines the scope of their tax obligations. Residents are taxed on their worldwide income, while non-residents are only taxed on income sourced from or derived in Ghana.

Securing a Tax Identification Number (TIN) is a mandatory first step before paying or filing taxes. The TIN is a unique number issued by the GRA for identification and is a prerequisite for many official transactions. An applicant can obtain a TIN by providing identification documents and completing an application at a GRA office or online.

Key Taxes on Individuals

The primary tax on individuals in Ghana is the Personal Income Tax (PIT), which applies to income from employment, business activities, and investments. Employment income includes salaries, wages, and bonuses, while investment income covers dividends, interest, and royalties.

Ghana’s PIT for residents is a progressive system where the tax rate increases with income. The rates are applied to different income brackets, with the first GHS 5,880 of annual income taxed at 0% and income exceeding GHS 600,000 taxed at 35%.

The system provides for certain reliefs that can be deducted from an individual’s assessable income before tax is calculated. These reliefs are available for circumstances such as marriage, old age, and supporting a child’s education, which lowers the final tax liability.

Individuals may also be subject to Capital Gains Tax, which is imposed on the net gain from the sale or transfer of a chargeable asset. These assets include items like land, buildings, and business assets.

Gift Tax is levied on the total value of taxable gifts received by a person within a year of assessment. Taxable gifts can include a range of assets transferred without consideration, though the law specifies certain exemptions.

Key Taxes on Businesses

Corporate Income Tax (CIT) is the main tax on the profits of companies in Ghana. The standard CIT rate is 25%, but different rates apply to specific sectors. For example, companies in the mining and petroleum sectors face a 35% rate, while those in the hotel industry are taxed at 22%.

A company’s taxable profit is determined by subtracting allowable deductions from its total income. Allowable deductions are expenses that are incurred wholly, exclusively, and necessarily for the purpose of generating the business’s income.

Value Added Tax (VAT) is a consumption tax on most goods and services in Ghana. The standard rate is 15%, but it is accompanied by a 2.5% National Health Insurance Levy and a 2.5% Ghana Education Trust Fund Levy on the same base. Businesses registered for VAT must charge these taxes on their sales.

The VAT system requires businesses to act as government collectors. At the end of each tax period, a VAT-registered business calculates the total output tax charged and subtracts the total input tax paid. The resulting net amount is then remitted to the Ghana Revenue Authority.

Withholding Tax (WHT) is an advance payment of income tax deducted at the source of a payment. It applies to transactions like payments for goods or services, dividends, and interest. WHT rates vary; for instance, the rate for supplying goods by a resident is 3%, while the rate for dividends paid to a resident is 8%.

Other Significant Levies and Duties

The Electronic Transfer Levy (E-Levy), a charge on certain electronic transactions, was repealed in early 2025. The Ghana Revenue Authority directed charging entities to cease all E-Levy deductions from April 2, 2025, to promote digital payments and ease the financial burden on households.

Customs duties are levied on goods imported into Ghana, with rates from 0% to 35% depending on the product. Excise duties are imposed on specific locally manufactured goods, such as alcoholic beverages and tobacco products.

The Communication Service Tax (CST) is a 5% levy on the charges for using communication services in Ghana. Consumers pay the tax, but it is collected by service providers on behalf of the government.

Tax Administration and Filing

The Ghana Revenue Authority (GRA) is the government body responsible for administering and collecting all taxes and levies. It oversees the entire compliance process, from taxpayer registration to the final payment of taxes.

Taxpayers can submit tax returns through the GRA’s online portal for electronic filing. Manual filing is also available at designated GRA tax offices throughout the country.

Adherence to filing deadlines is important for tax compliance. The annual income tax return for individuals and companies must be filed within four months after the end of their basis period, which for most taxpayers is the calendar year. Other taxes, like VAT and withholding tax, have monthly deadlines.

Once a tax liability is determined, payment can be made through designated commercial banks. The government also provides the Ghana.gov platform, a centralized digital portal that facilitates payments for public services, including taxes.