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Ghana

New Tax Bills

The Government of Ghana has introduced five new Bills, aimed at increasing revenue generation. Parliament has approved the following Bills, which are awaiting Presidential assent to enter into force:

Customs and Excise (Duties and Other Taxes) Amendment Bill

Amendments proposed by the Bill include:

  • Imposition of 20% import duty on telephone sets, including mobile, cellular and satellite phones; and
  • Levying of an ad-valorem duty (an environmental excise tax) of 5% of the ex-factory price of plastic and plastic products. The duty shall be calculated on the Cost, Insurance and Freight ("CIF") value of imported goods and shall be paid at the point of importation.

Further updates to the Bill were announced during Parliamentary proceedings of 4 July 2013, including a proposed increase in the environmental excise tax from 5% to 10%.

Special Import Levy Bill ("SILB")

The SILB imposes special import levies on the importation of specified goods at the point of importation during the period 2013 – 2015.

Affected goods include:

  • Machinery and equipment listed under Chapters 84 and 85 of the Harmonized System and Customs Tariff Schedules 2012 ("the HS Code") –a levy of 1% of CIF value;
  • Fertilizers listed under Chapter 31 of the HS Code – a levy of 2% of CIF value; and
  • All goods except Petroleum Products listed under Headings 27.09 and 27.10 of Chapter 27 of the HS Code – a levy of 2% of CIF value.

Communication Services Tax (Amendment) Bill ("CSTB")

The main purpose of the CSTB is to clarify the scope and coverage of the Communication Service Tax ("CST") introduced in 2008.

The Bill follows on the landmark judgment of the Commercial Division of the Accra Fast Track High Court in favour of telecom companies, effectively barring the Ghana Revenue Authority ("GRA") from collecting CST on interconnect services.

The CSTB intends to widen the scope of CST to include inter alia:

  • Operators or providers of electronic communication network or services as long as they use electronic communications;
  • Interconnect services;
  • Charges payable on Electronic Communication Services ("ECS") received by users from outside Ghana (i.e. international interconnect services);
  • Any supply of ECS, regardless of the eligibility of the services provider to provide ECS under the Electronic Communications Act (Act 755) and its Regulations; and
  • Promotions, bonuses and gift offers run by service providers.

Value Added Tax Amendment Bill

In terms of the Amendment Bill, telephone handsets are to be removed from the list of supplies exempt from Value Added Tax ("VAT"). VAT at 15% (12.5% VAT and 2.5% National Health Insurance Levy ("NHIL")) is to be charged on the supply and import of telephone sets, including mobile or cellular phones and satellite phones.

The VAT and NHIL are to be levied in addition to the CST on communication usage referred to above.

National Fiscal Stabilisation Levy ("NFSL") Bill

The objective of the NFSL Bill is to re-impose NFSL at 5% on profits before tax of specified companies for a period of 18 months covering the 2013 and 2014 years of assessment.

Companies and Institutions liable to pay NFSL include:

  • Banks;
  • Non-bank Financial Institutions;
  • Insurance Companies;
  • Telecommunication companies liable to collect and pay CST;
  • Breweries;
  • Inspection and Valuation Companies;
  • Companies providing mining support services; and
  • Shipping Lines, Maritime and Airport Terminal Operators.

The levy will not be allowed as a deduction for corporate income tax purposes.

The GRA is to administer the levy, which is payable on a quarterly basis. For the 2013 year of assessment, a proportionate payment is due on 30 September 2013 and 31 December 2013.

Ghana Investment Promotion Centre Bill

In terms of the Ghana Investment Promotion Centre ("GIPC") Bill, to be passed by Parliament:

  • Entities in all sectors would have to comply with the new GIPC Act. The existing GIPC Act, 1994 (Act 478) does not cover mining and petroleum enterprises;
  • An enterprise in which there is foreign participation is prohibited from commencing operations unless it is registered with the GIPC;
  • Enterprises which are wholly owned by Ghanaians is entitled to register with the GIPC, which would provide access to the benefits and incentives provided for by the GIPC;
  • The minimum foreign capital investment by non-Ghanaians is to be increased to USD50 000 (previously USD10 000) in the case of a joint enterprise with a Ghanaian partner and USD200 000 (previously USD50 000) in the case of an enterprise wholly-owned by a non-Ghanaian; and
  • Automatic expatriate quotas are linked to higher and expanded foreign capital brackets and extended monitoring and control of expatriate employment are expected.

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