Ghana flag Ghana: Business Environment

Tax rates in Ghana

Tax Rates

Consumption Taxes

Nature of the Tax
Value added tax (VAT)
Tax Rate
12.5%
Reduced Tax Rate
Exports of goods and services, as well as goods and services supplied to Free Zone Enclaves or a Free Zone Company and African textile prints for local textile manufacturers are zero-rated.
Supplies of wholesalers and retailers of goods are taxed at a flat rate of 3%.
Exempt items include: unprocessed agricultural and aquatic products in their raw state, including agricultural and aquatic food products that undergo preservation such as freezing, chilling, smoking, stripping, polishing, etc.; domestic transportation by bus and similar vehicles, and by train or boat; medical services and supplies; agricultural inputs, animals, livestock and poultry; provision of accommodation in a residential property.
Other Consumption Taxes
Excise duties are levied on the following goods: bottled water (17.5%), malt beverages (between 2.5% and 17.5%), beer (between 10% and 47.5%), spirits (between 0% and 25%), tobacco products (175%). A special 2% tax on imports applies to certain products in addition to VAT. An African Union Import Levy of 0.2% on the CIF value is levied on imports from Non-African Union Countries.
A National Health Insurance Levy and the Ghana Education Trust Fund Levy of 2.5% each are levied on goods and services in addition to VAT, together with the COVID-19 Health Recovery Levy (1%).

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Corporate Taxes

Company Tax
25%
Tax Rate For Foreign Companies
Resident companies are taxed on their worldwide income, non-resident companies are only taxed on the income sourced in Ghana.
Non-resident companies that conduct activities in Ghana through a branch are liable to pay a tax of 8% on earned repatriated profits, payable within 30 days.
Capital Gains Taxation
Ghana does not levy a separate capital gains tax; therefore, gains derived by a company are added to business income and are taxed at the standard corporate tax rate.
Main Allowable Deductions and Tax Credits
Depreciation of assets does not yield an allowable deduction when calculating taxable profits. It is replaced by capita allowances at statutory rates varying between 10% and 50%. The tax law does not provide for an explicit deduction of start-up expenses; however, they are usually deductible when they are wholly, exclusively, and necessarily incurred in the production of income. Interest expenses are ordinarily deductible, except in the case of restrictions that apply to thin capitalisation. Bad debts are usually deductible if the taxpayer proves they have taken all steps to pursue payments. Bad debts are not deductible if there is a 50% or more change in underlying ownership.
Charitable contributions to organisations or funds, scholarship schemes and rural or urban development programmes approved by the government qualify for deduction. COVID-19 donations are considered deductible expenses for income tax purposes.
Fines, penalties and taxes are usually not deductible for tax purposes.
Net operating losses can be carried for the three years immediately following the year in which the loss was incurred (up to five years for certain priority sectors). Carryback of losses is also permitted for taxpayers obtaining income relating to a long-term contract (unless there is a 50% or more change in underlying ownership).
Other Corporate Taxes
A Communication Services Tax (CST) is levied at a rate of 5% payable by both individual users and companies providing electronic communications services provided by service providers other than private electronic communications services.
National Health Insurance Levy (NHIL) and Ghana Education Trust Fund Levy (GETFL) at a rate of 2.5% each are levied on the supply of goods and services provided in Ghana, the importation of goods and imported services. These items are also subject to the newly established COVID-19 Health Recovery Levy (CHRL), at a rate of 1%.
Social security contributions payable by the employer amount to 13% of the salary.
Stamp duty is levied at rates ranging from 0.25% to 1% and from GHS 0.05 to GHS 25, depending on the type of transaction and the instrument. A capital duty of 0.5% is levied on the initial stated capital and any subsequent increase in the stated capital.
Business fees are payable annually to local District Assemblies or Municipal Authorities, with rates varying according to the location.
Property tax is levied by the relevant District Assembly/Municipal Authority at varying rates depending on the location.
Other Domestic Resources
Ghana Revenue Authority
Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.

Country Comparison For Corporate Taxation

  Ghana Sub-Saharan Africa United States Germany
Number of Payments of Taxes per Year 36.0 36.6 10.6 9.0
Time Taken For Administrative Formalities (Hours) 226.0 284.8 175.0 218.0
Total Share of Taxes (% of Profit) 55.4 47.3 36.6 48.8

Source: Doing Business, Latest available data.

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Individual Taxes

Tax Rate

Personal Income Tax Pogressives rates from 0% to 30%
From GHS 0 to 4,380 0%
Next GHS 1,320 5%
Next GHS 1,560 10%
Next GHS 36,000 17.5%
Next GHS 196,740 25%
Above GHS 240,000 30%
Non-residents 25% flat tax rate
Allowable Deductions and Tax Credits
The only deductible expenses are social security contributions, qualifying insurance premiums, and donations. Non-business expenses are not deductible. Expenses incurred wholly, exclusively, and necessarily in the production of the income that are subject to tax are deductible.
Annual tax reliefs are provided at varying lump sum rates for certain categories, including an individual with a dependent spouse or two dependent children (GHS 1,200), aged 60 or more (GHS 1,500) and the disabled (25% of assessable income from any business or employment). Professional, technical and vocational training costs give rise to up to GHS 2,000 of tax relief. The first GHS 4,380 are tax-exempt.
Special Expatriate Tax Regime
Non-residents pay taxes at the flat rate of 25% on their Ghana-sourced income.

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Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
See the list of Tax Conventions signed by Ghana
Withholding Taxes
Dividends: 8%, Interests: 0%/8%, Royalties: 15%.
Bilateral Agreement
The United Kingdom and Ghana are bound by a double taxation treaty.

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Sources of Fiscal Information

Tax Authorities
Overview of Ghana's tax measures in response to Covid-19
Ghana Revenue Authority
Other Domestic Resources
Domestic Tax Revenue Division

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Latest Update: September 2022

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