ARRANGEMENT OF REGULATIONS
PART I—CALCULATION OF INCOME
Division 1: Chargeable Income
Regulation
1. Calculation of Chargeable
Income
Division II: Deductions
2. Contributions to Charities
3. Scholarships
4. Donations for Rural and Urban
Development
5. Donations for Sports
Development and Promotion
6. Donations to Government for
Worthwhile Causes
7. Bad Debts of Banks
8. Capitalization of Foreign
Exchange Losses
9. Deductions not Allowed
10. Treatment of Losses
Division III: Tax Accounting
11. Generally Accepted Accounting
Principles
12. Long-term Contracts
13. Trading Stock
14. Consumable Stores
Division IV: Miscellaneous Rules
15. Leases
16. Rent Income from Residential
and Commercial Premises
17. Personal Reliefs and
Reductions
PART II—EXEMPTIONS
18. Extension of Bond Interest
Exemption
19. Diplomatic Officers
20. Government Contract Officers
PART III—INSURANCE
21. Reserve for Unexpired Risks
22. Income from Life Insurance
Business to be Calculated
Separately
PART IV—INTERNATIONAL MATTERS
23. Treatment of Foreign
Outgoings, Expenses, and Losses
24. Repatriated Profits of a
Permanent Establishment in Ghana
PART V—PAYMENT OF TAX
Division I—Tax Instalments
25. Tax Instalments Payable by
Members of Certain Associations
Division II—Withholding of Tax
from Income from Employment
26. Employers Required to Withhold
Tax
27. Amount to be Withheld by
Employers Generally
28. Amount to be Withheld by
Employers from Overtime and
Bonuses
29. Qualifying Cash Payment
30. Employee's Employment Tax
Liability
31. Primary Employment
32. Tax Reliefs and Tax Reliefs
Cards
33. Substantiated Retirement
Contributions
34. Consecutive Primary Employment
35. Returns by Employer
36. Deemed Employee Assessments
37. Returns of Income of
Individual with Two or More
Employments
38. Definitions
Division III—Withholding of Tax
from Other Amounts
39. Payment to Residents for Goods
and Services
40. Payment to Non-residents for
Goods and Services
41. Premiums Paid to Non-resident
Insurers
PART VI—ADMINISTRATION
42. Service of Documents
Electronically
PART VII—DISPUTE RESOLUTION
43. Proceedings Relating To Tax
Assessment
44. Registration on Commencement
and Notification on Cessation of
Business
PART IX—INTEREST, PENALTIES, AND
OFFENCES
45. Interest, Penalty, and Offence
Provisions in Act to Apply
PART X—INTERPRETATION
46. Interpretation
PART XI—TRANSITIONAL PROVISIONS
AND COMMENCEMENT
47. Capital Allowances
48. Self-assessment
49. Withholding of Tax from Income
from Employment
50. Commencement
SCHEDULES
IN exercise of the powers
conferred on the Minister
responsible for Finance by section
114 of the Internal Revenue Act,
2000 (Act 592), these Regulations
are made this 8th day of June,
2001.
PART I—CALCULATION OF INCOME
Division I: Chargeable Income
Regulation 1—Calculation of
Chargeable Income
Subject to the Act, the chargeable
income of a person for a year of
assessment shall be calculated in
accordance with the steps set out
in Schedule One to these
Regulations.
Division II: Deductions
Regulation 2—Contributions to
Charities
Any contribution made by a person
during a year of assessment to a
charitable institution or fund
approved by the Government may be
deducted in calculating the
person's chargeable income for the
year.
Regulation 3—Scholarships
Any amount expended by any company
or body of persons during a year
of assessment under a scheme of
scholarship approved by the
Government for a technical,
professional or other course of
study may be deducted in
calculating the chargeable income
of that company or body of persons
for the year.
Regulation 4—Donations for Rural
and Urban Development
Any donation made by a person
during a year of assessment for
the purpose of development of any
rural or urban area and approved
by the Government may be deducted
in calculating the person's
chargeable income for the year.
Regulation 5—Donations for Sports
Development and Promotion
Any donation made by a person
during a year of assessment for
the purpose of sports development
or sports promotion and approved
by the Government may be deducted
in calculating the person's
chargeable income for the year.
Regulation 6—Donations to
Government for Worthwhile Causes
Any donation made by a person
during a year of assessment to the
government for worthwhile
government causes approved by the
Commissioner may be deducted in
calculating the person's
chargeable income for the year.
Regulation 7—Bad Debts of Banks
For the purposes of section 18 of
the Act, a debt claim of a bank
regulated under the Banking Law,
1989 (P.N.D.C.L. 225) is
considered a bad debt where the
debt is written off in accordance
with the standards of the Bank of
Ghana.
Regulation 8—Capitalisation of
Foreign Exchange Losses
(1) A foreign exchange loss of a
capital nature referred to in
subsection (2) of section 21 of
the Act may only be capitalised
and capital allowances granted to
a person where the loss is
incurred by the person in the
production of income from a
business.
(2) A foreign exchange loss that
meets the requirements of
sub-regulation (1), shall,
together with any other such
losses, be placed in a pool
separate from assets of the
business and depreciated in
accordance with paragraph 3 of the
Third Schedule of the Act.
(3) The depreciation rate
applicable to a pool of
capitalised foreign exchange
losses referred to in
sub-regulation (2) is 10%.
(4) Any capital allowances granted
with respect to a pool of
capitalised foreign exchange
losses referred to in
sub-regulation (2) may only be
deducted in calculating income
from the business referred to in
sub-regulation (1).
Regulation 9—Deductions not
Allowed
(1) Paragraph (a) of subsection
(1) of section 23 of the Act shall
not restrict a deduction otherwise
available under section 39, 57, or
60 of the Act or under regulation
2, 3, 4, 5, or 6 of these
Regulations.
(2) Paragraph (b) of subsection
(1) of section 23 of the Act shall
not restrict a deduction otherwise
available under section 16, 17,
19, 20, 22, 39, 57 or 60 of the
Act or under regulation 2, 3, 4,
5, or 6 of these Regulations.
(3) Paragraph (e) of subsection
(1) of section 23 of the Act shall
not restrict a deduction otherwise
available under section 20 of the
Act.
Regulation 10—Treatment of Losses
(1) In deducting a loss from any
income in respect of any basis
period losses incurred from a
business and an investment shall
be treated separately.
(2) A loss incurred from a
business shall not be set off
against or deducted from an income
from an investment and a loss
incurred from an investment shall
not be set off against or deducted
from an income from a business.
(3) No deduction shall be made
under subsection (1) of Section 22
of the Act unless a claim in
respect of the loss is made to the
Commissioner in writing within
twelve months after the end of the
basis period in which the loss was
incurred.
Division III: Tax Accounting
Regulation 11—Generally Accepted
Accounting Principles
For the purposes of the Act and,
in particular, section 25,
“generally accepted accounting
principles” means those adopted by
the Institute of Chartered
Accountants (Ghana) from time to
time.
Regulation 12—Long-term Contracts
Where there is a change in
ownership of an entity of the type
referred to in section 54 of the
Act and after the change, the
entity incurs a loss which is
attributable to a long-term
contract, the loss may not be
carried back under subsection (3)
of section 30 of the Act to a
basis period commencing before the
change.
Regulation 13—Trading Stock
(1) For the purposes of section 31
of the Act, the closing value of
trading stock for a basis period
shall not exceed the opening value
of the trading stock for the
period plus the cost of trading
stock acquired during the period.
(2) No deduction is separately
available for any cost, expense or
amount that forms part of the cost
of trading stock.
Regulation 14—Consumable Stores
(1) For the purposes of
ascertaining the income of a
person for a basis period from any
business, but subject to
sub-regulation (2) of regulation
13, the cost of consumable stores
of the business may be deducted
only where the stores are not on
hand at the end of the period.
(2) The cost of consumable stores
that are not on hand at the end of
a basis period shall be determined
in the same manner as the cost of
trading stock disposed of during a
basis period referred to in
section 31 of the Act and
regulation 13.
Division IV: Miscellaneous Rules
Regulation 15—Leases
(1) Capital allowances shall not
be granted to the lessee of an
asset, whether the asset is leased
under an operating or finance
lease, but, where the asset is
used in the production of income
from a business or investment, a
deduction may be available for
lease rent incurred under the
lease.
(2) A lessor who leases an asset
under an operating lease
(a) may, by reason of subparagraph
(2) of paragraph 2 of the Third
Schedule of the Act, be granted
capital allowances with respect to
the asset; and
(b) shall include the whole amount
of rent paid under the lease in
calculating the lessor's income.
(3) A lessor who leases an asset
under a finance lease
(a) is not entitled to capital
allowances in respect of the
asset; but
(b) may reduce the amount of rent
included in calculating the
lessor's income by a capital
amount determined in accordance
with guidelines issued by the
Commissioner.
(4) The capital amount determined
under paragraph (b) of
sub-regulation (3) shall not
exceed the actual cost of the
asset at the end of the lease
term.
(5) If in respect of any
particular basis period the
capital amount determined under
paragraph (b) of sub-regulation
(3) is not deducted in calculating
the lessor's income that amount
shall not be carried forward.
Regulation 16—Rent Income from
Residential and Commercial
Premises
(1) Where an individual receives
rent income from any residential
or commercial premises the
Commissioner may calculate tax on
the rent income separately at a
flat rate of 10% on the gross rent
income in a year of assessment.
(2) The amount computed under
sub-regulation (1) shall be paid
by that person to the Commissioner
as a final tax and accordingly
that rent income shall not be
included in ascertaining that
individual’s income.
(3) Where sub-regulation (2)
applies, the individual shall not
be entitled to any deduction under
Division III of Part III of
Chapter I of the Act.
(4) Where a person other than an
individual receives rent income
which is not a business income in
any year of assessment that person
shall pay tax at the rate of 10%
on the gross rent income and the
provisions of sub-regulations (2)
and (3) shall apply to that
income.
Regulation 17—Personal Reliefs and
Reductions
(1) Unless extended by way of
double taxation arrangement,
non-resident persons are not
entitled to
(a) personal reliefs under section
39 of the Act;
(b) a reduction for life insurance
premiums under section 57 of the
Act; or
(c) a reduction for contributions
to the Social Security Pension
Scheme under section 60 of the
Act.
(2) Personal reliefs available
under paragraph (f) of subsection
(1) of section 39 of the Act shall
not exceed the lesser of the cost
referred to in that paragraph and
fifty currency points.
PART II—EXEMPTIONS
Regulation 18—Extension of Bond
Interest Exemption
Interest paid to a non-resident
person on bonds issued by the
government of Ghana is exempt from
tax.
Regulation 19—Diplomatic Officers
(1) Subject to sub-regulation (2),
members of the Ministry of Foreign
Affairs and officers attached to
official Ghanaian diplomatic or
consular missions abroad are
exempt from income tax in respect
of cost-of-living allowances for
services rendered outside Ghana.
(2) Training allowances paid in
lieu of salary are not exempt by
reason of sub-regulation (1)
Regulation 20—Government Contract
Officers
(1) Individuals who are not
citizens of Ghana and whom the
Government employs on a temporary
basis are exempt from income tax
with respect to any income from
the employment which is
(a) expressed to be exempt from
income tax under the terms of the
employment contract, and
(b) paid by the Government out of
the Consolidated Fund.
(2) Any income of an individual
described in sub-regulation (1)
that is not covered by an
exemption under that
sub-regulation shall be taxed in
accordance with the Act.
PART III—INSURANCE
Regulation 21—Reserve for
Unexpired Risks
For the purposes of paragraph (c)
of subsection (3) of section 56 of
the Act, “reserve for unexpired
risks” means the reserve required
to be maintained by the insurer
under section 23 of the Insurance
Law, 1989 (P.N.D.C.L. 227).
Regulation 22—Income from Life
Insurance Business to be
Calculated Separately
(1) A person's activities in
conducting a life insurance
business are treated as a business
separate from any other activity
of the person and the person’s
income or loss from the business
for any year of assessment shall
be calculated separately.
(2) Where a person conducting a
life insurance business derives
amounts that but for subsection
(2) of section 58 would be
included in calculating income
from the life insurance business
(a) the person's activities in
deriving those amounts are treated
as a business separate from the
life insurance business; and
(b) those amounts shall be
included in calculating the
person's income from that separate
business.
PART IV—INTERNATIONAL MATTERS
Regulation 23—Treatment of Foreign
Outgoings, Expenses, and Losses
(1) Any outgoing, expense, or loss
incurred by a person, to the
extent that it is not incurred in
the production of income accruing
in or derived from Ghana
(a) shall not be deducted in
calculating income accruing in or
derived from Ghana; but
(b) may, if deductible under the
Act, be deducted only in
calculating income accruing or
derived from outside Ghana.
(2) In accordance with section 64
of the Act and sub-regulation (1),
a person shall calculate
(a) any income of the person from
a business or investment that is
not accrued in or derived from
Ghana; or
(b) any loss of the person from a
business or investment that is not
incurred in Ghana,
separately from any income or loss
of the person from that business
or investment accruing in, derived
from or incurred in Ghana, as the
case requires, and a loss from one
calculation shall not be set
against income from the other
calculation.
Regulation 24—Repatriated Profits
of a Permanent Establishment in
Ghana
(1) For the purposes of section 66
of the Act, the repatriated
profits for a basis period of a
permanent establishment of a
non-resident person in Ghana shall
be calculated in accordance with
this regulation.
(2) For the purposes of
calculating the repatriated
profits of a permanent
establishment in Ghana, the
non-resident person shall maintain
in Ghana an accumulated profits
account which, at the end of each
basis period of the person, shall
be
(a) credited with the net profits;
and
(c) debited with the repatriated
profits,
of the permanent establishment for
the period.
(3) Subject to sub-regulation (4),
the repatriated profits of a
permanent establishment for a
basis period are calculated
according to the following
formula—
A
+ B - C
where
A is the total balance sheet
value of assets, net of
liabilities, of the permanent
establishment at the commencement
of the period;
B is the net profit of the
permanent establishment for the
period or, where the permanent
establishment has a net loss for
the period, that loss expressed in
a negative amount; and
C is the total balance sheet
value of assets, net of
liabilities, of the permanent
establishment at the end of the
period.
(4) The repatriated profits of a
permanent establishment for a
basis period shall not exceed the
sum of
(a) the net profit of the
permanent establishment for the
year; and
(b) the balance of the permanent
establishment's accumulated
profits account at the end of the
previous basis period after the
adjustments referred to in
sub-regulation (2).
(5) For the purposes of this
regulation
(a) the net profit of a permanent
establishment for a basis period
is such profit as reduced by the
tax payable on the chargeable
income of the non-resident person
relating to activities of the
permanent establishment for the
period;
(b) the total balance sheet value
of assets of a permanent
establishment and the net profit
or loss of a permanent
establishment shall be calculated
in accordance with the accounting
principles adopted by the
Institute of Chartered Accountants
(Ghana) from time to time; and
(c) the total balance sheet value
of assets at the commencement of a
basis period equals the total
balance sheet value of assets at
the end of the previous basis
period.
(6) Subject to section 111 of the
Act, the tax imposed on a
non-resident person under section
66 of the Act is in addition to
any other tax imposed on that
person.
PART V—PAYMENT OF TAX
Division I: Tax Instalments
Regulation 25—Tax Instalments
Payable by Members of Certain
Associations
(1) This regulation applies to the
associations, occupational groups,
and classes of persons mentioned
in the table in paragraph 1 of
Schedule Two to these Regulations.
(2) An association or occupational
group identified in the table in
paragraph 1 of Schedule Two shall
collect tax from the class of
persons identified in that table
and those persons shall pay the
tax in accordance with that
Schedule.
(3) Tax collected by an
association or occupational group
under sub-regulation (2) shall be
paid to the Commissioner not later
than the end of the week following
the week in which it is collected
from the person.
(4) In accordance with the
definition of “tax” in section 167
of the Act, tax collected from a
person by an association or
occupational group under
sub-regulation (2), in addition to
being tax paid by the person, is
treated as tax payable by the
association or occupational group
on behalf of the person and is due
at the time referred to in
sub-regulation (3).
(5) Any tax collected from a
person under this regulation does
not relieve the person from the
obligation to file a return of
income under section 72 of the Act
but shall be credited against tax
assessed to the person in
accordance with subsection (9) of
section 80 of the Act.
(6) Subject to sub-regulation (7)
a person who pays tax to an
association or occupational group
in accordance with this regulation
is not required to pay tax by
quarterly instalments under
subsection (1) of section 80 of
the Act.
(7) Where the Commissioner is of
the opinion at any time that a
person who belongs to any class of
persons identified in Schedule Two
should come within the provisions
of subsection (1) of Section 80 of
the Act, the Commissioner may
direct in writing that that person
shall not pay tax in accordance
with this regulation and section
76 of the Act shall apply
(8) The principal officers of any
association or occupational group
which collects tax from any class
of persons identified in the
Schedule shall be jointly and
severally liable for the proper
accounting of any money collected
by virtue of these Regulations.
(9) Notwithstanding sub-regulation
(8) any person who belongs to any
class of persons identified in
Schedule Two who fails or refuses
to pay due date tax specified in
that Schedule shall be treated as
having failed to pay the tax on
due date and Regulation 45 shall
apply to that person in addition
to any other enforcement provision
of the Act.
Division II: Withholding of Tax
From Income from Employment
Regulation 26—Employers Required
to Withhold Tax
(1) An employer shall withhold
sufficient tax from qualifying
cash payments made to an employee
during a year of assessment to
meet the employee’s employment tax
liability for the year in
accordance with this Division.
(2) Only the following employers
are required to withhold tax in
accordance with section 81 of the
Act and this Division—
(a) resident employers; and
(b) non-resident employers with a
permanent establishment in Ghana.
(3) For the purposes of the Act
and this Division,
(a) any non-resident public
entertainer including a stage,
motion picture, or radio artist,
musician, athlete, or boxer who
performs services in Ghana is
treated as an employee;
(b) any person who makes payment
for those services to the
entertainer or an associate of the
entertainer is treated as the
entertainer’s employer;
(c) the payment is treated as made
to the entertainer in respect of
the employment; and
(d) that payment is subject to
withholding tax under section 81
of the Act and this Division and
at the rate mentioned in paragraph
2 of Part I of the First Schedule
of the Act.
(4) An employer shall deduct tax
at the appropriate rate from the
qualifying cash payments payable
to an employee at the date the
employee leaves the employment.
Regulation 27—Amount to be
Withheld by Employers Generally
(1) Subject to regulation 28,
where an employer makes a
qualifying cash payment to an
employee during a year of
assessment, the employer shall
withhold an amount from the
payment calculated in accordance
with the following formula—
A
x B
C
where
A is the amount of the payment;
B is the employee's employment
tax liability for the year
estimated under sub-regulation (2)
less tax withheld under this
sub-regulation by the employer
from prior qualifying cash
payments made by the employer to
the employee during the year; and
C is the total of the payment
referred to in A and qualifying
cash payments still to be made by
the employer to the employee
during the year estimated under
sub-regulation (2).
(2) For the purposes of making a
calculation under sub-regulation
(1), an employer shall, at the
time of making a qualifying cash
payment to an employee
(a) make a reasonable estimate of
(i)
the employee’s employment tax
liability for the year of
assessment during which the
payment is made; and
(ii) the amount of qualifying cash
payments still to be made by the
employer to the employee during
the year; or
(b) where an estimate has been
made under paragraph (a) for the
year of assessment in which the
payment is made, consider whether
that estimate is still accurate
and, if not, make a new estimate
under paragraph (a).
(3) In making an estimate under
sub-regulation (2), an employer
shall not take into account
(a) any tax reliefs of the
employee unless the employee has
provided the employer with a tax
reliefs card in accordance with
sub-regulation (2) of regulation
32 prior to the estimate; or
(b) any life insurance premiums
mentioned in paragraph (a) of
sub-regulation (1) of regulation
33 unless the employee has
provided the employer with a copy
of the receipt as mentioned in
that paragraph prior to the
estimate.
(4) On application in writing, the
Commissioner may adjust the amount
to be withheld under
sub-regulation (1) where the
employee’s qualifying employment
income will include an amount that
does not have a source in Ghana.
Regulation 28—Amount to be
withheld by Employers from
Overtime and Bonus
(1) Where
(a) an employer makes a qualifying
cash payment during a year of
assessment to a qualifying junior
employee for overtime work by the
employee; and
(b) the sum of the payment and
other payments for overtime made
by the employer to the employee
previously during the year does
not exceed 50% of the employee’s
qualifying employment income from
the employment for the year,
the employer shall withhold tax
from the payment at the rate of
(i)
in the case where the employee
earns not more than 5.2 currency
points per month from the
employment in respect of overtime,
2.5% of the gross amount of the
payment; and
(ii) in the case where the
employee earns more than 5.2
currency points per months from
the employment in respect of
overtime, 10% of the gross amount
of the payment.
(2) Where
(a) an employer pays a bonus to an
employee during a year of
assessment;
(b) the payment is a qualifying
cash payment; and
(c) the sum of the payment and
other bonuses paid by the employer
to the employee previously during
the year does not exceed the
lesser of
(i)
15% of the employee's qualify in
employment income from the
employment for the year; or
(ii) 720 currency points,
the employer shall withhold tax
from the gross amount of the
payment at the rate of 5%.
(3) Tax withheld under
sub-regulation (1) or (2) is a
final tax on the overtime or bonus
payment and
(a) the payment shall not be
included in calculating the
employee’s income from the
employment; and
(b) the tax paid by withholding
satisfies the employee’s tax
liability with respect to the
payment and may not be reduced by
any tax credits allowed to the
employee under the Act.
(4) Where an employer makes a
payment to an employee for
overtime or as a bonus and the
employer is not required to
withhold tax from the payment
under sub-regulation (1) or (2),
(a) the payment shall be included
in calculating the employee’s
income from the employment; and
(b) the employer shall withhold
tax from the payment in accordance
with the provisions of this
Division.
(5) For the purposes of this
regulation, an employee is a
“qualifying junior employee” for a
year of assessment if the employee
is a junior staff member whose
qualifying employment income from
the employment for the year does
not exceed 6000 currency points.
Regulation 29—Qualifying Cash
Payment
(1) A qualifying cash payment is a
payment
(a) made by an employer to an
employee or on behalf of an
employee that is required to be
included in the employee's
qualifying employment income for a
year of assessment, and
(b) that is made (in whatever
currency) in cash, by cheque or
other bill of exchange drawn on a
financial institution or that
otherwise involves a debit to an
account of the employer held with
a financial institution.
(2) Where the amounts required to
be withheld by an employer under
regulation 27 are not sufficient
to meet an employee’s employment
tax liability for a year of
assessment, including by reason of
in-kind payments, the employer
shall pay tax in an amount equal
to the insufficiency.
(3) Any tax payable by an employer
under sub-regulation (2),
(a) shall be paid
(i)
within fifteen days after the end
of the year of assessment, and
(ii) in the same manner as
provided for by section 87 of the
Act for tax withheld from
qualifying cash payments to an
employee;
(b) shall be treated as paid by
the employee for the purposes of
calculating the employee's tax
liability for the year but shall
not be included in calculating the
employee's income;
(c) shall not be deducted in
calculating the income of the
employer; and
(d) shall not be recoverable by
the employer from the employee.
Regulation 30—Employee's
Employment Tax Liability
(1) Subject to sub-regulation (2),
an employee’s employment tax
liability for a year of assessment
is calculated
(a) in the case of a primary
employment of the employee, by
applying the appropriate rates in
Part I of the First Schedule of
the Act to the excess of the
following—
(i)
the employee's qualifying
employment income from the
employment for the year; less
(ii) the employee's tax reliefs
and substantiated retirement
contributions for the year; and
(b) in the case of a secondary
employment of the employee, by
applying to the employee's
qualifying employment income from
the employment for the year,
(i)
where the employee is a resident
individual, the highest rate
mentioned in paragraph 1 of Part I
of the First Schedule of the Act;
and
(ii) where the employee is a
non-resident individual, the rate
mentioned in paragraph 2 of Part I
of the First Schedule of the Act.
(2) Where
(a) an employer is required to
withhold tax in accordance with
regulation 27 at the rate
mentioned in subparagraph (i) of
paragraph (b) of sub-regulation
(1) from qualifying cash payments
made to an employee during a year
of assessment; and
(b) withholding at that rate would
cause hardship for the employee by
reason that none of the employee's
chargeable income for the year is
likely to be taxed at that rate,
the Commissioner may, on
application from the employee,
reduce the rate at which the
secondary employer must withhold
tax in accordance with
sub-regulation (3).
(3) Where an employee applies to
the Commissioner for a reduction
of tax rate by reason of hardship
under sub-regulation (2) the
Commissioner shall apply the
following rates
(a) where the income from the
secondary employment does not
exceed ¢2,400,000 per annum at a
flat rate of 15%.
(b) where the income from the
secondary employment exceeds
¢2,400,000 but does not exceed
¢5,400,000 per annum at a flat
rate of 20% and
(c) where the income from the
secondary employment exceeds
¢5,400,000 per annum at a flat
rate of 30%.
(4) For purposes of these
Regulations a person will be said
to suffer a hardship under
sub-regulation (2) where the tax
payable on the aggregate income
from that person’s primary and
secondary employment in the year
of assessment is 50% higher than
that which that person would
otherwise be liable to pay in
respect of that income under the
provision of Section 1(2) of the
Act.
Regulation 31—Primary Employment
(1) The primary employment of an
employee for a year of assessment
is the employment with respect to
which the employee has provided an
employer with a declaration under
sub-regulation (2) that relates to
the year.
(2) For the purposes of
sub-regulation (1), an employee
may furnish an employer with a
declaration nominating the
employment as the employee’s
primary employment and the
declaration
(a) shall be in the form
prescribed by the Commissioner and
may be incorporated in the form
for the tax reliefs card;
(b) shall be signed and dated by
the employee and the employer; and
(c) may relate to one or more
years of assessment.
(3) An employee shall not have
more than one primary employment
at any one time.
(4) An employee may withdraw a
nomination made under regulation
(2)[sic] only at the end of a year
of assessment.
(5) Where an employee has a
primary employment that ceases
during a year of assessment and,
after that cessation, provides a
different employer with the
employee’s tax reliefs card
current for the year and filled
out in accordance with regulation
34, the different employer becomes
the employee’s primary employer.
Regulation 32—Tax Reliefs and Tax
Reliefs Cards
(1) On application by an employee
on a prescribed form in accordance
with such procedure as the
Commissioner may determine, the
Commissioner may issue the
employee with a tax reliefs card
certifying the personal reliefs to
which the employee is entitled
under section 39 of the Act for
one or more years of assessment.
(2) The tax reliefs of an employee
for a year of assessment equal the
amount certified on any tax
reliefs card issued to the
employee by the Commissioner under
sub-regulation (1) that covers the
year but only where the employee
has provided the card to the
employer of the employee’s primary
employment.
Regulation 33—Substantiated
Retirement Contributions
(1) Subject to the limit in
sub-regulation (2), an employee’s
substantiated retirement
contributions for a year of
assessment are life insurance
premiums referred to in subsection
(1) of section 57 of the Act and
contributions made to the Social
Security Pension Scheme referred
to in subsections (3) and (4) of
section 60 of the Act where
(a) the premium is paid during the
year by the employee and the
employee has provided the employer
with a copy of the receipt for
payment; or
(b) the premium or contribution is
paid or to be paid during the year
by the employer on the employee’s
behalf.
(2) An employee’s substantiated
retirement contributions for a
year of assessment shall not
exceed the limits referred to in
subsection (2) of section 57 and
subsection (5) of section 60 of
the Act calculated as though the
only income derived by the
employee for the year is the
qualifying employment income from
the primary employment of the
employee.
Regulation 34—Consecutive Primary
Employment
(1) Where an employee's primary
employment ceases during a year
the employer shall insert the
following information on the
relevant part of the employee’s
tax reliefs card,
(a) the amount of qualifying
employment income derived by the
employee from the employment for
the year to the date the
employment ceases;
(b) the amount of tax withheld, in
accordance with section 81 of the
Act and regulation 26 (but not
regulation 28), from payments made
by the employer to the employee
with respect to the employment
that are made during the year to
the date the employment ceases;
and
(c) such further information as
the Commissioner may require.
(2) An employer required to insert
information on a tax reliefs card
under sub-regulation (1) shall
insert the information and return
the card to the employee by the
time the employment ceases.
(3) Sub-regulation (4) applies
where an employee
(a) ceases a primary employment
during a year of assessment;
(b) provides the employee’s tax
reliefs card, as adjusted under
sub-regulation (1), to a different
employer during the year; and
(c) nominates the employment with
the different employer as the
employee’s new primary employment
under regulation 31 effective
during the year but after the
prior primary employment has
ceased.
(4) Where this sub-regulation
applies, the new primary employer
shall, for the purposes of
calculating tax to be withheld
under regulation 27 from
qualifying cash payments to be
made to the employee during the
remainder of the year of
assessment
(a) add to the qualifying
employment income from the new
primary employment for the year
the qualifying employment income
notified by the employee’s prior
primary employer on the tax
reliefs card; and
(b) add to tax considered to be
withheld by the new primary
employer during the year from
qualifying cash payments to
employee, the amount of tax
notified by the employee’s prior
primary employer as withheld on
the tax reliefs card.
Regulation 35—Returns by Employer
Where an employer has been an
employer with respect to a primary
employment during a year of
assessment, then, together with
the return and information
referred to in subsections (4) and
(5) of section 81 of the Act
required to be furnished for the
year, the employer shall furnish
(a) the official number of any tax
reliefs card provided to the
employer by an employee with
respect to the year; and
(b) the certificate of insurance
relating to any employee’s life
insurance for which receipts have
been furnished to the employer
under paragraph (a) of
sub-regulation (1) of regulation
33.
Regulation 36—Deemed Employee
Assessments
(1) For the purposes of subsection
(7) of section 81 of the Act, an
employee’s assessable income for a
year of assessment is considered
to consist exclusively of income
from an employment only if all
assessable income derived by the
employee during the year consists
of income from an employment which
at the time the income is derived
is the employee’s primary
employment.
(2) The condition in
sub-regulation (1) may be met
where an employee has more than
one employment during a year
provided that at the time any
amount to be included in
calculating the employee's
assessable income is derived from
an employment, that employment is
the employee's primary employment.
(3) An employee may qualify for
the deemed assessment procedure
under subsection (7) of section 81
of the Act despite receiving
payments that are exempt from tax
or that are subject to final tax
under section 2 or 3 of the Act or
regulation 28.
Regulation 37—Returns of Income of
Individual with Two or More
Employments
(1) Where
(a) an individual has two or more
employments at any one time during
a year of assessment;
(b) all of the individual’s
employers are of the type referred
to in sub-regulation (2) of
regulation 26; and
(c) the individual has no
assessable income from any
business or investment for the
year,
the individual is not obliged to,
but may, lodge a return of income
for the year under section 72 of
the Act.
(2) Until such time as an
individual referred to in
sub-regulation (1) files a return
of income, the individual’s tax
liability for the year with
respect to that individual's
chargeable income is equal to
(a) the amounts required to be
withheld from qualifying cash
payments made to the individual
during the year under regulation
27; plus
(b) any amount payable by an
employer for the year in respect
of the individual under
sub-regulation (3) of regulation
29.
(3) An individual with two or more
employments at any one time during
a year of assessment that does not
fall within sub-regulation (1)
shall furnish a return of income
for the year in accordance with
section 72 of the Act.
Regulation 38—Definitions
In this Division,
“employee’s employment tax
liability” has the meaning in
regulation 30;
“primary employment” with respect
to an employee means the
employment with respect to which
the employee has a declaration
existing under regulation 31;
“qualifying cash payment” has the
meaning in regulation 29;
“qualifying employment income”
from an employment for a year of
assessment is equal to the total
of all amounts
(a) that are required to be
included in ascertaining the
income of the employee from the
employment for the year; and
(b) that either have a source in
Ghana or that are received by a
resident individual during the
year;
“secondary employment” with
respect to an employee means any
employment that is not the primary
employment of the employee;
“substantiated retirement
contributions” of an employee for
a year of assessment has the
meaning in regulation 33; and
“tax reliefs” and “tax reliefs
card” of an employee for a year of
assessment have the meanings in
regulation 32.
Division III: Withholding of Tax
from Other Amounts
Regulation 39—Payment to Residents
for Goods and Services
The rate of withholding tax
applicable to payments to a
resident person for goods and
services under Part IV, paragraph
3, sub-paragraph (c) of the First
Schedule to the Act shall be 7.5%.
Regulation 40—Payment to
Non-residents for Goods and
Services
In exercising the power under
subsection (2) of section 86 of
the Act, the Commissioner may
require the person to withhold
tax, at the rate provided in Part
VIII of the First Schedule of the
Act, from part only of a payment.
Regulation 41—Premiums Paid to
Non-Resident Insurers
(1) A person who
(a) in the course of conducting a
business or investment, enters
into a contract for short-term
insurance with a non-resident
person or a permanent
establishment situated in Ghana of
a non-resident person; and
(b) pays to the non-resident
person or permanent establishment
a premium with respect to the
insurance that accrues in or is
derived from Ghana,
shall withhold tax from the gross
amount of the premium at the rate
of 5%.
(2) The Act applies to tax
withheld or required to be
withheld under sub-regulation (1)
as though the tax were withheld or
required to be withheld under
Subdivision B of Division III of
Part X of Chapter I of the Act.
PART VI—ADMINISTRATION
Regulation 42—Service of Documents
Electronically
(1) For the purposes of the Act,
where a person has notified the
Commissioner in writing of an
electronic address for service of
documents under the Act, including
a facsimile number or
electronic-mail address, a
document to be served on the
person by the Commissioner under
the Act is considered sufficiently
served if sent to the address.
(2) For the purposes of
sub-regulation (1), a document is
considered sent to an electronic
address if the sender receives
(a) in the case of a message sent
to a facsimile number,
confirmation from the sending
facsimile machine that the
transmission is sent or okay; and
(b) in the case of a message sent
to an electronic-mail address,
confirmation from the server of
the recipient that the message has
been received.
PART VII—DISPUTE RESOLUTION
Regulation 43—Proceedings Relating
to Tax Assessment
No person shall institute any
proceedings relating to or any
action in connection with any
issue arising out of an assessment
under the Act except through the
objection and appeal procedure
provided in Division II of Part
III of Chapter IV of the Act.
PART VIII—REGISTRATION OF BUSINESS
Regulation 44—Registration on
Commencement and Notification on
Cessation of Business
(1) No person shall carry on any
business unless that person has
registered that business with the
Commissioner on a prescribed form.
(2) Where any person in any year
of assessment discontinues any
business or changes the registered
address of the business in which
he has been engaged, he shall
notify the Commissioner in writing
within thirty days of the
cessation or change of address of
that business.
PART IX—INTEREST, PENALITIES, AND
OFFENCES
Regulation 45—Interest, Penalty,
and Offence Provisions in Act to
Apply
The provisions of Subdivisions B,
C, and D of Division III of Part
III of Chapter IV of the Act apply
to a person who fails to comply
with these Regulations as though
these Regulations were a part of
the Act.
PART X—INTERPRETATION
Regulation 46—Interpretation
(1) In these Regulations, “the
Act” means the Internal Revenue
Act, 2000 (Act 592).
(2) Expressions used in these
Regulations that are used in the
Act have, unless the context
otherwise requires, the same
meaning in these Regulations as
they have in the Act.
PART XI—TRANSITIONAL PROVISIONS
AND COMMENCEMENT
Regulation 47—Capital Allowances
(1) For a person’s first basis
period ending within the year of
assessment 2001 (the “first basis
period”), the Third Schedule of
the Act shall be applied in
accordance with the steps set out
in Schedule Three to these
Regulations.
(2) The residual value of a
depreciable asset of a business of
a person as at the end of the
person’s last basis period ending
within the year of assessment 2000
means,
(a) in the case of an asset with
respect to which the person may
have been granted capital
allowances under the Third
Schedule of the Income Tax Decree,
1975 (S.M.C.D. 5)
(i)
the cost of the asset; less
(ii) any capital allowances
granted or that may have been
granted to the person in respect
of the asset under the Third
Schedule of the Income Tax Decree,
1975 (S.M.C.D. 5) assuming the
person claimed the allowances and
was taxable with respect to the
income of the business; and
(b) in the case of any other asset
(i)
the cost of the asset; less
(ii) any capital allowances that
may have been granted to the
person in respect of the asset
prior to the year of assessment
2001 under the Third Schedule of
the Act assuming
(A) the Act as passed was in force
during the year of assessment in
which the asset was acquired;
(B) the asset was placed in a pool
of depreciable assets by itself;
and
(C) the person claimed the
allowances and was taxable with
respect to the income of the
business.
(3) A person shall not be granted
any capital allowances with
respect to a foreign exchange loss
of a capital nature referred to in
subsection (2) of section 21 of
the Act that was incurred prior to
the Act coming into force.
Regulation 48—Self-assessment
For the purposes of subsection (3)
of section 78 of the Act, the
Commissioner may permit an
estimate under subsection (2) of
that section to be furnished by a
person at any time prior to the
date by which the person must pay
the first instalment under section
80 of the Act.
Regulation 49—Withholding of Tax
from Income from Employment
(1) Withholding obligations under
Division II of Part V of these
Regulations come into effect on
the date these Regulations come
into force.
(2) Notwithstanding sub-regulation
(1), after these Regulations come
into force employers may, at their
choice and without penalty but
only until otherwise notified by
the Commissioner, withhold tax
from payments to employees under
(a) Division II of Part V of these
Regulations; or
(b) the arrangements existing
before the commencement of the Act
and these Regulations.
Regulation 50—Commencement
These Regulations shall come into
force on 1st July, 2001.
SCHEDULES
SCHEDULE ONE
Regulation 1
Step 1 Identify each
of the person’s businesses,
employments, and investments
conducted during any basis period
ending within the year.
Step 2 Calculate
separately for each business,
employment, and investment
identified, the income of the
person from that business,
employment, or investment for each
basis period ending within the
year.
Step 3 To calculate
the income of the person from a
business, employment, or
investment, work out according to
ordinary accounting rules the
gains or profits from that
business, employment, or
investment, as the case requires.
Step 4 Adjust the
gains or profits worked out to
ensure that all amounts required
to be included by sections 7, 8,
and 9 of the Act, as the case
requires, are included in the
calculation but exclude any
payment subject to final tax under
section 2 or 3 of the Act or
regulation 28 of these
Regulations.
Step 5 Adjust the
gains or profits worked out to
ensure that any amount deducted in
the calculation is only deducted
in accordance with Division III of
Part III of Chapter I of the Act
but do not deduct any amount that
relates to a payment subject to
final tax under section 2 or 3 of
the Act.
Step 6 The gains or
profits of the person from the
business, employment, or
investment as worked out under
Step 3 and adjusted under Step 4
and Step 5 is the income of the
person from that business,
employment, or investment, as the
case requires.
Step 7 Determine
whether the income from any such
business, employment, or
investment has the necessary
connection with Ghana as provided
for by section 6 of the Act and
whether the income is exempt
income.
Step 8 Any income from
a business, employment, or
investment for a basis period
ending within the year that has
the necessary connection with
Ghana and that is not exempt
income is the assessable income of
the person from the business,
employment, or investment for the
year.
Step 9 Aggregate the
assessable income of the person
for the year from each business,
employment, and investment.
Step 10 Reduce the
aggregate in Step 9 by any
deductions available for the year
under regulations 2, 3, 4, 5, and
6 and, where the person is an
individual, any deductions
available for the year under
sections 39, 57, and 60 of the
Act.
Step 11 The resulting
amount is the person’s chargeable
income for the year.
SCHEDULE TWO
Regulation 25
TAX INSTALMENTS PAYABLE BY MEMBERS
OF
CERTAIN ASSOCIATIONS
1. The associations, occupational
groups, and classes of persons
mentioned in sub-regulation (1) of
regulation 25 are—
|
Association or Occupational
Group |
Class of Persons |
Type 1
Type 2
Type 3
Type 4
Type 5
Type 6
Type 7
Type 8
Type 9 |
The Ghana Private Road
Transport Union, the Ghana
Co-operative Transport
Association, the Progressive
Transport Owners Association
and any similar organisation
or association or their agents
identified by the Commissioner
that operates at any lorry
park, taxi rank, or similar
place
Ghana National Tailors and
Dressmakers Association
Susu Collectors
Association
Ghana Chop Bar And Cooked Food
Sellers Association
(Traditional Caterers
Association)
Butchers Association
Hairdressers Association
Garage Owners Association
Licensed Diamond, Gold Buyers
and Winners Association
Co-operative Distillers
Association of Ghana |
Any person who owns a vehicle
of the type referred to in
paragraph 2 of this
Schedule.
Machine owners
Susu collectors
Bar owner
Butchers
Hairdressers
Garage owners (mechanics,
welders, sprayers,
electricians, blacksmiths,
vulcanizers, machinists)
Licensees and sub-agents
Manufacturers and retailers of
alcoholic beverages |
2. The tax to be collected from
and payable by Type 1 class
persons is as follows:
Owner of— |
Rate of Tax |
1. Taxi and cars on hire
within town
2. “Trotro” vehicles 19 seats
and less
3. “Trotro” vehicles 20 to 34
seats
4. “Trotro” vehicles 35 seats
and more
5. Light dry cargo service
(Market Service)
6. “One pound one pound”
cars
7. Mini buses other than
“trotro”
8. Long distance passenger
buses
9. Container trucks in Accra-Tema
10. Long distance cargo trucks
and articulated vehicles
11. Wet cargo vehicles
including water tankers
12. Tipper trucks |
¢2,000 per week
¢2,000 per week
¢3,000 per week
¢4,000 per week
¢3,000 per week
¢50 per ¢1,000 fare per
trip
¢50 per ¢1,000 fare per
trip
¢50 per ¢1,000 fare per
trip
¢50 per ¢1,000 charge per trip
¢50 per ¢1,000 charge per trip
¢50 per ¢1,000 charge per trip
¢50 per ¢1,000 charge per trip |
3. The tax payable in accordance
with paragraph 2 shall be paid—
(a) in the case of persons falling
within items 1, 2, 3, 4, and 5 of
the table, during the course of
the week in which payment is to be
made.
(b) in the case of persons falling
within items 6, 7, 8, 9, 10, 11,
and 12 of the table, at the start
of each trip.
4. The tax to be collected from
and payable by Type 2, 3, 4, 5, 6,
7, and 8 class of persons is as
follows:
Class of
Sub-class
of Persons
Rate
Persons
Type 2
1
Machine
¢1,250 per week
2-3
Machines
¢2,250 per week
4-5
Machines
¢3,200 per week
Above 5 Machines
¢4,200 per
week
Type 3 —
¢3,200 per week
Type 4
Category
A
¢4,200 per week
Category
B
¢3,200 per week
Category
C
¢2,000 per week
Category D
¢ 1,000 per week
Type 5
Category
A
¢4,200 per week
Category B
¢3,200 per week
Type 6
Category
A
¢4,200 per week
Category
B
¢3,200 per week
Category C
¢2,000 per week
Type
7
Cities
¢5,200 per week
Urban
¢3,800 per week
Rural
¢2,000 per week
Type 8
Licensee
¢50,000 per month
Sub-agent
¢10,000 per month
5. The tax payable in accordance
with paragraph 4 shall be paid
during the course of the week or
month in which payment is to be
made.
6. The tax to be collected from
and payable by Type 9 class of
persons is as follows:
Category of Person
Rate of Tax
Manufacturer
5% of the
cost of drums of alcohol sold
Retailer
5% of the
cost of alcohol retailed
7. The tax payable in accordance
with paragraph 6 shall be paid
during the course of the week the
drums are sold or the alcohol is
retailed.
SCHEDULE THREE
Regulation 47
Step 1 Separately for
each business of the person,
identify depreciable assets owned
by the person as at the end of the
person's last basis period ending
within the year of assessment 2000
that are used by the person in
carrying on the business.
Step 2 Work out in
accordance with sub-regulation (2)
the residual value of each
depreciable asset as at the time
referred to in Step 1.
Step 3 Identify the
class of each depreciable asset in
accordance with paragraph 2 of the
Third Schedule of the Act.
Step 4 Separately for
each business and each of the
person’s Class 1, 2, 3, and 4
depreciable assets, add together
the residual values of the assets
of that Class.
Step 5 The result is
treated as the written down value
of the Class 1, 2, 3, or 4 pool of
depreciable assets, as the case
requires, as at the time referred
to in Step 1.
Step 6 Add to the
written down value of the pool as
at the time referred to in Step 1,
the cost base of assets added to
the pool after that time but
before the end of the first basis
period.
Step 7 Reduce the
result, but not below zero, by any
consideration received from the
realisation of an asset from the
pool during the first basis
period. (Any excess of amounts so
received is treated in accordance
with subparagraph (4) of paragraph
3 of the Third Schedule of the
Act).
Step 8 The result, if
any, is the written down value of
the pool at the end of the first
basis period to which the formula
in subparagraph (1) of paragraph 3
of the Third Schedule of the Act
shall be applied.
Step 9 In the case of
a Class 5 or 6 depreciable asset
and subject to the modifications
in Step 10, apply paragraph 4 of
the Third Schedule of the Act
using the cost base of the asset
worked out in accordance with
section 99 of the Act.
Step 10 In applying the
limit in subparagraph (3) of
paragraph 4 of the Third Schedule
of the Act and for the purposes of
the definition of “written down
value” in subparagraph (4) of that
paragraph, capital allowances
granted to a person for the asset
includes the excess of the cost
base of the asset over the
residual value of the asset as at
the end of the person's last basis
period ending within the year of
assessment 2000.
YAW OSAFO-MAAFO
Minister responsible for Finance
Date of Gazette Notification: 22nd
June, 2001.
Entry into force: |