Ghana has a complex system of corporate taxation that comprises different tax types, rates, and rules. Corporate entities operating in Ghana must comply with the applicable tax regulations to avoid penalties and legal consequences. In this report, we have discussed the different types of corporate taxation in Ghana, including tax brackets, GST/VAT, sales tax, import duties, and export duties, and provided relevant legislation and dates passed for each type of tax.
Corporate Income Tax (CIT):
Corporate income tax is imposed on the profits of all corporate entities in Ghana, including resident and non-resident companies. The applicable tax rate is 25%, and the tax is paid annually. The legislation governing CIT in Ghana is the Income Tax Act 2015 (Act 896), which was passed on 1st January 2016.
Value Added Tax (VAT):
VAT is a consumption tax imposed on the supply of goods and services in Ghana. The standard VAT rate in Ghana is 12.5%, and the tax is charged on the value of goods and services at each stage of production or distribution. All businesses with an annual turnover of GHS 200,000 or more are required to register for VAT. The legislation governing VAT in Ghana is the Value Added Tax Act 2013 (Act 870), which was passed on 14th January 2013.
National Health Insurance Levy (NHIL):
The National Health Insurance Levy is a tax imposed on goods and services in Ghana to support the National Health Insurance Scheme. The applicable NHIL rate is 2.5%, and it is charged on the value of goods and services subject to VAT. Therefore, the effective tax rate for VAT and NHIL combined is 15%. The legislation governing NHIL in Ghana is the National Health Insurance Act 2012 (Act 852), which was passed on 20th June 2012.
Special Import Levy:
The Special Import Levy is a tax imposed on specific imported goods in Ghana to protect local industries. The applicable tax rate ranges from 0% to 20%, depending on the nature of the imported goods. The legislation governing the Special Import Levy in Ghana is the Special Import Levy Act 2013 (Act 861), which was passed on 17th December 2013.
Import duty is a tax imposed on all imported goods in Ghana. The applicable tax rate ranges from 0% to 35%, depending on the nature of the imported goods. The rate is calculated based on the CIF (Cost, Insurance, and Freight) value of the goods. The legislation governing import duty in Ghana is the Customs Act 2015 (Act 891), which was passed on 1st January 2016.
Export duty is a tax imposed on certain exported goods in Ghana. However, currently, Ghana does not impose any export duty on any goods.