Promotion and Protection Agreements with a number of countries to further enhance the protection and security of the investment regime. In February 2016, the Common External Tariff ( CET ) became effective in Ghana to promote free trade and ensure greater economic integration within the West African sub-region. The CET ensures that the same tariffs are imposed on an eligible item imported into the region, irrespective of the member country in which it first lands. Importation of Capital Each transfer of foreign exchange to or from Ghana shall be made through a person licensed to carry out the business of money transfers or any other authorised dealer in Ghana. Each payment in foreign currency, to or from Ghana between a resident and non-resident or between non- residents, shall be made through an authorised dealer bank. All banks with a universal banking license are authorised The general rate of corporate tax for resident companies is 25%. Companies operating in specific industries may be taxed at varied rates depending on the industry in which they operate. Mining and petroleum exploration companies for instance pay tax at 35% on profits, while hotels pay a reduced rate of 22%. Incentives exist in the form of reduced rates for targeted industries such as agriculture, agro processing and waste management companies, which may be taxed at rates as low as 1%. Companies in these industries may also enjoy reliefs for specified periods of time depending on the sector in which they operate. Manufacturing companies located in a regional capital of Ghana, with the exception of Accra, pay tax at the rate of 18.75% and those located outside regional capitals pay tax at the rate of 12.5%. Ghana operates a worldwide income tax regime, and therefore, non-resident companies that operate through a permanent establishment or branch or deemed to have a permanent establishment in Ghana, are taxed at the same rates as Ghanaian resident companies on any income connected to that Ghanaian permanent establishment irrespective of the source of the income. Non-resident companies with permanent establishments in Ghana may also be entitled to certain reliefs in respect of repatriation of dealer banks. Taxation Corporate Tax
branch profits outside the country. Companies are entitled to claim capital allowances in respect of the depreciable assets that they own and are used in carrying on business for each year of assessment. Capital allowances granted are to be utilized in the year of assessment in which they are received and may not be carried forward or applied to subsequent years. Capital gains are included in the business income of a company and subject to tax at the applicable corporate tax rate. Income Tax The chargeable income of non-resident individuals is subject to a 20% flat rate. Residents are subject to tax on a graduated scale known as a Pay As You Earn ( PAYE ) basis. The PAYE is computed using the Graduated Annual Personal Income Tax rates below (in Ghanaian Cedi – GHS and USD 3 ): Employees are also assessed on additional benefits-in-kind which may accrue to them as a result of their employment. These include accommodation, vehicle and fuel provided to the employee by the employer. Other Taxes Other taxes levied include Value Added Tax ( VAT ) of 15% and the National Health Insurance Levy ( NHIL ) of 2.5%. VAT and NHIL are jointly chargeable on and payable at the point of supply, exportation or importation of goods and services. Certain specified supplies of goods and services are zero- rated. There are also goods and services in the country 4 , with special exemptions available on specific products mainly within the agricultural and health supply industries. The following are subject to VAT/NHIL: • the supply of goods and services made in Ghana; • the importation of goods; • the exportation of non-traditional goods; and • the supply of imported services. Income Tax rate 0 - 2,592 ($ 0- $573.50) 0 2,593 – 3,888 ($574 – $860) 5% 3,889 – 5,700 ($861– $1,261) 10% 5,701 - 38,879 ($ 1,262 – $8600) 17.5% 38,880 and above ($ 8601 and above) 25%
3 USD 1 = GHS 4.52 4 VAT is charged at a rate of 15% and NHIL is at a rate of 2.5%
Africa Investment Guide | 37
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