Global Tax Alert | 9 October 2013

Ghana reinstates 5% profits tax

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On 12 July 2013, the President of the Republic of Ghana gave his assent to a number of tax initiatives passed by Parliament. With respect to Direct Taxes, the National Fiscal Stabilization Levy Act, 2013 (the Act) was reinstated.

Under the Act, a 5% National Fiscal Stabilization Levy has been re-imposed on profits before tax for specified companies and institutions within the country for the 2013 to 2014 years of assessment.

The specified Companies and Institutions liable to pay the levy include:

  • Banks (excluding rural and community banks)
  • Non-Bank Financial Institutions
  • Insurance companies
  • Telecommunications companies liable to collect and pay the Communications Service Tax under the Communications Service Tax Act, 2008
  • Breweries
  • Inspection and valuation companies
  • Companies providing mining support services
  • Shipping lines, maritime and airport terminals

In addition to the National Fiscal Stabilization Levy Act, a number of Indirect Tax initiatives were passed and assented to, including the following:

  • Communications Service Tax (Amendment) Act, 2013
  • Special Import Levy Act, 2013

The Communications Service Tax (Amendment) Act amended the 2008 Act to provide clarity on the scope and coverage of the tax and other related matters. Specifically, the Government has introduced a 6% excise tax to be levied on charges payable by a user of electronic communication services other than private electronic communication services (i.e., an electronic communications service used within one enterprise or any body corporate with which it is affiliated, to satisfy its internal needs and operated without interconnection to a public electronic communications network that enables electronic communications to persons other than within the enterprise or the body corporate). The purpose of which is to help mobilize additional revenue from communication services rendered by mobile operators.

With respect to the Special Import Levy Act, 2013, a Special Import Levy is imposed on imported goods at the point of entry for the 2013, 2014, and 2015 years of assessments. The Levy is to be determined on the Cost, Insurance and Freight (CIF) value of the goods. The rate of the Special Import Levy is determined as follows:

S/No.

Description of goods

Rate of levy

1

Machinery and Equipment listed under Chapters 84 and 85 of the Harmonized System and Customs Tariff Schedules 2012

1% of CIF value

2

All other goods except Petroleum Products listed under Headings 27.09 and 27.10 of Chapter 27 and fertilizers listed under Chapter 31 of the Harmonized System and Customs Tariff Schedules 2012

2% of CIF value

For additional information with respect to this Alert, please contact the following:

Ernst & Young Advisory Services Limited, Accra, Ghana
  • Wilfred Okine
    +233 21 779 742
    wilfred.okine@gh.ey.com

EYG no. CM3861