On 12 March 2021, Mr. Osei Kyei-Mensah-Bonsu, the Finance Minister of Ghana’s Caretaker Govt., presented the 2021 Budget Statement and Economic Policy in the Parliament. Among the revenue provisions in the 2021 budget are the following tax items:

  • The introduction of a levy of 5% on profit-before-tax of banks.
  • A COVID-19 health levy composed of a one percentage point increase in the national health insurance levy increased to 3.5% from 2.5% and a one percentage point increase in the flat rate of VAT increased to 4% from 3%.
  • To maintain the improvements of roads, Government will review existing road tolls and align them with current market rates.
  • The Energy Sector Recovery Levy of 20 pesewas per litre on petrol/diesel under the ESLA is hereby proposed for approval.

COVID-19 Support

Government is planning to introduce additional reliefs for different sections of the population, especially those hardest hit by the pandemic:

  • Tax Rebate: Provision of a rebate of 30 percent on the income tax due for companies in hotels and restaurants, education, arts and entertainment, and travel and tours for the second, third and fourth quarters of 2021;
  • Tax Stamps: Suspension of quarterly income tax installment payments for the second, third and fourth quarters of 2021 for small businesses using the income tax stamp system;
  • Vehicle Income Tax: Suspension of quarterly installment payments of the vehicle income tax for the second, third and fourth quarters of 2021, for trotros and taxis as part of measures to reduce the cost of transportation; and
  • Extension of the waiver of interest as incentive for early payment of accumulated tax arrears: A waiver of penalty and interest on accumulated tax arrears up to December 2020 to reduce cash flow challenges for companies and individuals who arrange terms with GRA to pay up the principal by September 2021. Beneficiaries of these relieves will have to be registered with the Ghana Revenue Authority and must have fulfilled their first quarter tax obligations.

Other tax measures

  • Replacing the Ghana card unique identification number (GUIN) with a tax identification number (TIN).
  • The appointment of the executive secretary and members of the independent Tax Appeals Board by the first half of 2021.
  • Guidelines for the taxation of e-services.