Ghana: Tax developments in response to COVID-19
General Information
This page offers an overview of tax developments being reported globally by KPMG member firms in response to the Novel Coronavirus (COVID-19).
The content will be updated regularly. However, due to the fast-moving pace of change, it may not always reflect the most current developments in a given jurisdiction. Please refer to the date of accuracy and refer to the relevant links, under additional information, for original source information.
Date accurate as of: 20 May 2020
Tax-related implications in Ghana associcated with the COVID-19 pandemic include:
Corporate Income Tax
The outbreak is a non-adjusting event as at 31 December 2019 since little was known of the virus. Therefore, the outbreak posed minimal tax consequences as at 31 December 2019. The reason being that, adverse adjustments such as increase in provisions including bad debts and impairments (which are treated as non-allowable expenses under our current Income Tax Act, 2015 (Act 896)) that may arise as a result of the pandemic may not be required.
Payment and Filing of Tax Returns
The Revenue Administration Act, 2016 (Act 915) allows taxpayers to apply for extension of deadlines for filing and paying tax. The Commissioner-General may grant the approval if good cause is shown. As a result, where taxpayers envisage that they will be unable to file their tax returns by the due dates, an opportunity for extension could be sought for a maximum period of two months.
- Legislation to implement provisions previously announced by the Minister of Finance includes tax relief measures in response to the coronavirus (COVID-19) pandemic.
- Some of the relief proposals either required that they be enacted into law or needed the written directive from the Commissioner-General before becoming effective and binding on both the revenue authority and taxpayers.
- Under the prior release, the date for filing of self-assessment tax returns for companies having a 31 December year-end was extended from 31 March to 30 April 2020.
- The due date for filing annual corporate income tax and individual income tax returns has been extended from four months to six months after the end of the tax period. Taxpayers who resolve their outstanding debts by 30 June 2020 will be granted relief from penalties.
Personal Income Tax
The Ghana tax system taxes individuals on residency basis. As such, a non-resident becomes resident for tax purposes if present in the country for an aggregate period of one hundred and eighty-three (183) days or more in any twelve-month period that commences or ends during the year of assessment. This law does not take into consideration a non-resident who has overstayed and thus attained residency status as a result of the pandemic.
Therefore, where there is no legislative instrument that amends this provision, instead of the individual being subject to tax in Ghana at the non-resident rate of 25%, that individual will be subject to tax at the graduated tax rate with 30% being the highest marginal rate on annual taxable income exceeding GHS240,000.
