Most Read Contributor in South Africa, September 2016
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
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
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
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
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;
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
Value Added Tax Amendment
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
Companies and Institutions liable to
pay NFSL include:
Non-bank Financial Institutions;
Telecommunication companies liable to collect and pay CST;
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.
Investment Promotion Centre Bill
In terms of the Ghana Investment
Promotion Centre ("GIPC") Bill, to be passed by
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
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
Automatic expatriate quotas are linked to higher and expanded
foreign capital brackets and extended monitoring and control of
expatriate employment are expected.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Effective collaboration amongst government agencies, automation of processes and capacity building by tax authorities have always been identified by stakeholders as strategies for achieving an efficient tax system.
In response to information provided by FIRS, NSE has sent letters to publicly listed companies, who were purportedly identified by FIRS as non-compliant.
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