Tax reliefs to support efforts by SMEs to create jobs
Relief legislation passed by Parliament in December 2021
Tax reliefs to alleviate burden on taxpayers
Parliament in December 2021, at the request of the government, passed the legislature for the implementation of some six new tax reliefs.
The move formed part of efforts to cushion taxpayers against the impact of the COVID-19 pandemic as well as support efforts by small and medium-sized businesses to create jobs.
The Ghana Revenue Authority has begun the implementation of the new tax reliefs in accordance with the passage.
Here are the taxes that are being included in the tax reliefs.
Persons whose annual incomes are up to GH¢4,500 a year or GH¢375 a month are being exempted from paying taxes
Suspension of the payment of Vehicle Income Tax on selected vehicles, including intercity commercial vehicles and intercity/long-distance buses
Limit the application of the flat rate Value Added Tax scheme to businesses whose annual income is up to GH¢500,000
Waiver of interest and penalty on tax arrears for all categories of taxpayers
Reduction of the withholding tax on gold exports by small-scale miners by 50 percent
Exemption of local textile manufacturers from paying VAT
The GRA said these reliefs will mean that government is forfeiting part of the revenue that should have accrued to the state through taxes.
Government, however, stated that the reliefs will encourage businesses to fulfill their tax obligations as well as raise the market share of domestic manufacturers from the current 20 to 50 percent by 2025.
Commissioner of the Domestic Tax Revenue Division (DTRD) of the GRA, Edward Appenteng Gyamerah, told the Daily Graphic this is expected to double employment in the textile sector from the current 2,500 to 4,500 by 2025 and also revive the small-scale mining sector’s contribution to gold production to about 50 percent in the coming years.
“All these will translate into revenue because people will get employment, taxes will be paid and their consumption will increase,” he said.
“To help correct this anomaly and minimise the diversion of gold exports by small-scale miners, the government reduced the tax, which is significant,” he added.