Ghana Revenue Authority Structure

Structure of the Ghana Revenue Authority

• The Ghana Revenue Authority (GRA) is headed by the Commissioner-General, with support from three Commissioners in charge of:
  • Domestic Tax Revenue Division (DTRD)
  • Customs Division (CD)
  • Support Services Division (SSD)

Domestic Tax Revenue Division (DTRD)

• Responsible for the collection of both domestic direct and indirect taxes
• Core functions include:
  • Identifying all taxpayers
  • Assessing taxpayers for tax and levies
  • Collecting taxes and levies
  • Paying all amounts collected into the Consolidated Fund

Customs Division (CD)

• Responsible for the collection of taxes at the ports, borders, and entry points
• Performs a preventive function by patrolling the country's borders and other strategic locations
• Performs agency duties on behalf of Ministries, Departments, and Agencies

Withholding Tax (WHT) Rates

• Resident Persons:
  • Dividends: 8%
  • Interest (excluding individuals and resident financial institutions): 8%
  • Rent on properties:
    • Residential: 8%
    • Non-Residential: 15%
  • Natural resource payments and royalties: 15%
  • Fees or allowances, to a resident director, manager, trustee, or board member: 20%
  • Fees for examiners, invigilators, supervisors of examination, or part-time teaching or lecturing: 10%
  • Endorsement fee: 10%
  • Winnings from Lottery: 10%
  • Realisation of asset or liability: 3%
  • Commission to a resident lotto receiver or agent: 10%
  • Commission to a sales agent: 10%
  • Commission to a resident insurance sales or canvassing agent: 10%
  • Insurance premium with a source in Ghana to a non-resident person: 5%
  • Supply or use of goods exceeding GH₵ 2,000 per annum: 3%
  • Supply of any works exceeding GH₵ 2,000 per annum: 5%
  • Supply of services by an entity exceeding GH₵ 2,000 per annum: 7.5%
  • Payment for unprocessed precious minerals: 1.5%
  • Payment to petroleum subcontractor: 7.5%

Withholding Tax (WHT) Rates - Non-Resident Persons

• Income of non-resident individual from employment: 25%
• Management, consulting, and technical service fee: 20%
• Dividend: 8%
• Royalties, natural resources payments, and rents: 15%
• Endorsement Fees: 20%
• Repatriated Branch after-tax profits: 8%
• Interest Income: 8%
• Realisation of asset or liability: 10%
• General insurance premium: 5%
• Petroleum sub-contractor: 15%
• Supply of goods, or works, or the supply of any services where the contract gives rise to income from Ghana: 20%
• Payments received by a person who conducts a relevant transport business: 15%
• Payments received by a person who conducts a business of transmitting or receiving messages by cable, radio, optical fibre, or satellite or electronic communication: 15%

Withholding by Employer - S.114 (PAYE)

• An employer shall withhold tax from the payment of an amount to be included in ascertaining the income of an employee from the employment
• Threshold: the amount of the contract exceeds GHS 2,000
• Two or more contracts in respect of the same goods, works, or services shall be treated as a single contract

Exemptions

• Withholding from Supply of Goods, Service Fees, and Contract Payments (Exemptions) - S.116
  • Exemption does not apply to a premium paid to a resident insurance company
  • Exemption does not apply to payments under a contract for the sale of goods which constitute trading stock of both the vendor and the purchaser
  • Exemption may be granted in writing by the Commissioner-General for a good cause shown
  • Exemption may be granted in writing by the Commissioner-General if a person has a satisfactory tax record
• Taxation of Shareholders - S.71
  • Exemption: a dividend paid to a resident company by another resident company is exempt from tax where the company that received the dividend controls indirectly or directly, at least 25% of the voting power of the company which paid the dividend

Exempt Amounts

• Salary, allowances, facilities, pension, and gratuity of the President
• Income of the Government of Ghana or a local authority
• Income of a public corporation
• Pension
• Capital sum paid to a person as compensation or a gratuity in relation to a personal injury or the death of another person
• Income of a non-resident person from a business of operating ships or aircrafts
• Income from cocoa of a cocoa farmer
• Income of a person receiving instruction at an educational institution from a scholarship, exhibition, bursary, or similar educational endowment
• Income of an individual entitled to privileges to the extent provided for by the Diplomatic Immunities Act, 1962 (Act 148) or a similar enactment
• Income of an individual to the extent provided for in an agreement between the Government of Ghana and a foreign government or a public international organisation
• Cost of living allowance, other than training allowance paid in place of salary for services rendered abroad
• Income from a temporary employment of an individual with the Government of Ghana
• Income of an individual from employment in the public service of the government of a foreign country
• Income of a state-owned or state-sponsored educational institution
• Income of an institution or trust of a public character established by an enactment solely for the purpose of scientific research
• Interest paid to an individual by a resident financial institution or on bonds issued by the Government of Ghana
• Interest or dividend paid or credited to a holder or member on an investment in an approved unit trust scheme or mutual fund
• Interest paid to a non-resident person on bonds issued by the Government of Ghana
• Gains from the realisation of bonds issued by the Government of Ghana by a non-resident person
• Gains from the realisation of securities traded on the Ghana Stock Exchange up to December 31st, 2021
• Income of an approved unit trust scheme or mutual fund
• Income of an approved Real Estate Investment Trust (REIT)

Minimum Chargeable Income - S.2A

• A person may be required to compute and pay tax on a minimum chargeable income of 5% of turnover where the person has been declaring losses for the previous 5 years of assessment

Income from Business

• Exclusions: income specified in respect of an exemption under section 7, a final withholding payment, and an amount included in calculating the income of the person from an employment

Income from Investment

• Inclusions: dividends, interest, annuity, natural resource payment, rent, and royalty, gain from the realisation of an investment asset, an amount derived as consideration for accepting a restriction on the capacity of the individual to conduct the investment, a gift received by a person other than a gift received in respect of business or employment, and any other amount required to be included under section 59, Part III, or Part VI
• Exclusions: income specified in respect of an exemption under section 7, a final withholding payment, and an amount included in calculating the income of the person from an employment or business

Structure of the Ghana Revenue Authority

• The Ghana Revenue Authority (GRA) is headed by the Commissioner-General, with support from three Commissioners in charge of the following divisions:
  • Domestic Tax Revenue Division (DTRD)
  • Customs Division (CD)
  • Support Services Division (SSD)

Domestic Tax Revenue Division (DTRD)

• Responsible for the collection of both domestic direct and indirect taxes
• Core functions include:
  • Identifying all taxpayers
  • Assessing taxpayers for tax and levies
  • Collecting taxes and levies
  • Paying all amounts collected into the Consolidated Fund

Customs Division (CD)

• Responsible for the collection of taxes at the ports, borders, and entry points
• Performs a preventive function by patrolling the country's borders and other strategic locations
• Performs agency duties on behalf of Ministries, Departments, and Agencies

Concept of Tax Residence

• A company is resident in Ghana for a year of assessment if:
  • Incorporated under the Companies Act, 2019 (Act 992)
  • Management and control of the company's affairs are exercised in Ghana at any time during that year
• Any other person is a non-resident person

Assessable Income

• The assessable income of a person for each year of assessment is the income from any employment, business, or investment (EBI)
• Assessable income for a resident person includes:
  • Income from each employment, business, or investment for the year
  • Income from any employment, business, or investment for the year, whether or not the source from which the income is derived has ceased
• Assessable income for a non-resident person includes:
  • Income from the employment, business, or investment for the year, to the extent that the income has a source in Ghana
  • Income connected with a Ghanaian permanent establishment, irrespective of the source of the income

Method of Accounting

• A person may account for income tax purposes on either a cash or accrual basis, whichever most clearly reflects the income of that person
• The Commissioner-General may require a person to use a particular method of accounting or approve an application to change the method of accounting

Tax Compliance

• A withholding agent who fails to withhold tax shall pay the tax that should have been withheld
• A withholding agent who pays the tax that should have been withheld is entitled to recover an equal amount from the withholdee
• A provision in an agreement that prohibits the deduction or withholding of a tax is void
• A withholding agent shall prepare and serve a withholding certificate on the withholdee, specifying the amount of payments made and the tax withheld
• A withholding certificate shall cover a calendar month and shall be served on the withholdee within 30 days after the end of the month

Basic Definitions and Concepts

• The income of a person from an employment includes:
  • Income from an employment, business, or investment
  • Exclusions, such as exempt amounts and final withholding payments
• The income of a person from an investment includes:
  • Gains and profits from conducting the investment
  • Inclusions, such as dividends, interest, annuity, natural resource payments, rent, and royalty
  • Exclusions, such as exempt amounts and final withholding payments