Friday, July 19, 2024

GRA begins implementation of six new tax reliefs

The Ghana Revenue Authority, GRA, has commenced the implementation of some six tax reliefs introduced by the government as part of efforts to cushion taxpayers against the impact of the COVID-19 pandemic and support efforts by small and medium-sized businesses to create jobs.

The implementation of these reliefs follows the passage of relevant legislation by Parliament in December 2021 at the request of the government, to help alleviate the burden on taxpayers due to the outbreak of the pandemic.

The new reliefs implemented by the Ghana Revenue Authority include the exemption of people whose annual incomes are up to GH¢4,500 or GH¢375 a month from paying taxes, as well as the suspension of the payment of Vehicle Income Tax on selected vehicles, including intercity commercial vehicles and intercity/long-distance buses.

The GRA will also limit the application of the flat rate Value Added Tax scheme to businesses whose annual income is up to GH¢500,000.

The other reliefs include the waiver of interest and penalty on tax arrears for all categories of taxpayers, the reduction of the withholding tax on gold exports by small-scale miners by 50 percent, and the exemption of local textile manufacturers from paying VAT.

The GRA believes that by granting these reliefs, the government would be sacrificing part of the revenue that should have accrued to the state through taxes in a trade-off meant to revive businesses, as well as encourage individuals and firms to fulfill their tax obligations.

The Authority hopes to raise the market share of domestic manufacturers from the current 20 to 50 percent by 2025 through these new reliefs, and also almost double employment in the textile sector from the current 2,500 to 4,500 by 2025.

It also plans to use the policy to revive the small-scale mining sector’s contribution to gold production to about 50 percent in the coming years.

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