30 August 2023

Corporate Tax In Ghana: An Assessment Of Faırness In The Tax Objectıon And Appeal Processes

It is trite law that tax is a creature of statute and a debt to the government . Thus, it can only be imposed by an Act of Parliament. Morse and William explained that a tax is a compulsory levy...
Ghana Tax
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It is trite law that tax is a creature of statute and a debt to the government1. Thus, it can only be imposed by an Act of Parliament. Morse and William2 explained that a tax is a compulsory levy imposed for the purposes of providing public goods, by an organ of government and whose essence lies in its compulsory nature.

There are two types of taxpayers: the individual taxpayer and the corporate taxpayer. A corporate taxpayer is any registered corporate entity (partnership, company, trust) that is resident in Ghana for tax purposes or a non-resident entity that has a permanent establishment in Ghana. A company will be deemed resident in Ghana if it is incorporated under the Companies Act 2019 (Act 992) or the management and control of its affairs are exercised in Ghana at any time during the year of assessment.3

The focus of this discussion is on the corporate taxpayer.

How is Corporate Tax Paid?

In accordance with Section 2 of the Income Tax Act 20154, a company is required to pay tax on its total earnings from its business or investment (assessable income)5 after deductions allowed by law have been made out of same. This is referred to as the chargeable income. The process of determining the chargeable income in order to impose the tax rate is called assessment. Various forms of taxation assessment are utilized in Ghana: assessment by the taxpayer referred to as self-assessment; and assessment by the Commissioner-General of Ghana Revenue Authority ("GRA") through pre-emptive assessment or by adjusted assessment.6

Forms of Assessment

The first form of assessment to tax is the Self-Assessment where the taxpayer self-determines the tax payable and files his or her returns voluntarily and as required to be filed in that year.7

The second form of assessment is the pre-emptive assessment. This is an assessment of the tax liability of the taxpayer done by the Commissioner General, especially in the absence of self-assessment under the following circumstances:

  1. when the taxpayer becomes bankrupt or goes into liquidation; or
  2. where the Commissioner-General reasonably determines that the taxpayer is about to leave the jurisdiction or cease operation in Ghana; or
  3. where the Commissioner-General deems it appropriate to assess a person who has failed to maintain adequate documentation required by law in this regard.8

The third form of assessment is the adjusted assessment. The Commissioner-General under the law has the power to adjust or appoint someone to adjust an assessment to ensure the exactitude of the taxpayer's tax liability by the use of best judgment and information reasonably available to the Commissioner-General.9 Therefore where the Commissioner-General reasonably believes that a taxpayer's self-assessment is not the true reflection of the records, the Commissioner-General may adjust that assessment upwards or downwards considering the circumstances, or may appoint someone to assess a taxpayer who has failed to file his or her annual returns based on the information available.10

When the Commissioner-General makes such an assessment under any tax law, a tax decision is said to have been made.11 A dissatisfied taxpayer whom the decision affects directly is given within thirty days after being notified of the decision to exercise the right to show his disapproval of that decision.12 This is called an objection to a tax decision.

Objection and Appeal to Tax Decision Process

As earlier highlighted, when the Commissioner-General makes a tax decision, the taxpayer has the opportunity to oppose it within the confines of the law. Section 42 of Act 915 lays down the procedure for objecting to a tax decision in Ghana. The process is as follows:

First of all, the taxpayer must file the objection in writing stating the reasons for the objection and address it to the Commissioner-General, within 30 days from the date that the company became aware of the tax decision to which it is objecting.13 It must be noted that where the company requires additional time beyond the 30-day ultimatum to file the objection, an extension can be requested, the grant of which is at the discretion of the Commissioner-General.14 In the absence of an extension granted to the company, the assessment of the Commissioner-General shall be final after the 30-day window.15

A company that seeks to object to any assessment by the GRA must understand that for objections concerning import taxes, the company must have a clean sheet as far as outstanding taxes and the tax in dispute are concerned before any objections will be considered. In the event that the objection relates to any other taxes, the company will be required to pay all outstanding debts and at least 30% of the tax to which the objection relates.16 These are sine qua non to the consideration of the objection.

The Commissioner-General has the discretion to either disallow the objection or allow it in whole or in part after considering the grounds of the objection17 and such a decision must be justified with reasons and communicated to the company within 60 days after receipt of the objection.18

Where a company is dissatisfied with the decision on the objection, it has the opportunity to appeal against the decision. This is provided for under section 44 of Act 915 as amended by the Revenue Administrative (Amendment) Act 202019 thus:

"44.(1) A person who is dissatisfied with a decision of the Commissioner-General, may, within thirty days, appeal against the decision to the Independent Tax Appeal Board referred to in this Act as "the Appeals Board" as set out in the Fourth Schedule.

(2) A person who is dissatisfied with a decision of the Appeals Board may appeal against the decision to the Court within thirty days from the date the decision was served on the person."

This provision is a beneficial enhancement in the dispute resolution mechanism under Act 915. It gives taxpayers an opportunity to seek redress before the Independent Tax Appeals Board ("ITAB") within 30 days from the date a decision of the Commissioner-General is communicated to the taxpayer. The ITAB is mandated to hear and determine appeals against the decisions on objection to tax decisions before any resort to a Court Action.20

Are the Objection and Appeal Processes Fair?

Over time, companies have had occasion to voice their concerns about certain developments that give credence to the conclusion that the dispute resolution mechanism is riddled with some level of unfairness. Some of these complaints include the length of time it takes to resolve tax disputes and the fact that the Commissioner-General presides over an objection process against his own tax decision. The assertion has been repeatedly put forth that the Commissioner-General invariably always affirms his earlier tax decision in his objection decisions. This practice of the Commissioner General being the arbiter of taxpayers' objection against his tax decisions is cited as one that goes against administrative processes.

Others have also lamented about the fairness of the objection system including the mandatory requirement imposed by section 42 (5) of Act 915 to pay the whole or 30% of the disputed tax before the objection is considered, as in breach of administrative justice; guaranteed under Articles 23 and 296 of the 1992 Constitution of Ghana.

The Supreme Court in the case of Kwasi Afrifa v Ghana Revenue Authority & Attorney-General21 was invited to declare these requirements in Section 42(5) as inconsistent with and violative of administrative justice as guaranteed under Article 23 of the 1992 Constitution. The Supreme Court agreed that "to the extent that Section 42 of Act 915 confers on the [Ghana Revenue Authority] an administrative power to determine a tax objection, the law governing the exercise of such administrative power must be fair and reasonable and in tandem with Article 23."22

The Court further explained that any law that seeks to restrict or limit the right of a person to administrative justice must pass the two-pronged test of 'necessity' and 'proportionality'." In effect, this case has made it abundantly clear that the GRA being an administrative body is required to act fairly and reasonably without being arbitrary, capricious, or biased.

Section 4223 does two things: presents the Commission-General whose decision is being challenged the opportunity to be a judge in his own cause and grants the Commissioner-General the discretion to vary or disallow the objection by considering the integrity of the dispute resolution procedure and the need to protect Government revenue.

An important administrative law rule or principle is the principle of "procedural justice" which in the context of administrative law, is largely anchored on "natural justice". Natural justice principles (collectively referred to here as "principles") connote certain procedures, safeguards, or principles developed by the common law and imposed on persons particularly public persons in the performance of their functions. In this sense, these are relatively limited, specific principles developed by the courts24.

Generally, in the performance of their duties, such persons should follow the principles and any decision contrary to the dictates of these principles is null and void.

Dickey and Fui25 argued that:

"mere description of a statutory function as 'administrative,' 'judicial,' 'quasi-judicial' or even 'quasi-administrative, is not in itself enough to settle the requirement of natural justice . . . and the role of natural justice could now be regarded as a sheet-anchor in protecting the individual from the unfair exercise of certain powers which directly affect him".

Justice Kpegah JSC in a dissenting opinion in the case of In Re Effiduase Stool Affairs (No.1) Republic v. Numapau, President of the National House of Chiefs and Others; Ex-Parte Ameyaw II (No. 1)26, stated:

"It is a cardinal principle which underpins our administration of justice and, indeed, that of all the common law countries that a person is not allowed to be a judge in his own cause. This is often expressed in the Latin maxim nemo judex in causa sua. This is a principle of natural justice and it is so basic that its deliberate violation is now regarded as a misconduct..."

This means that a decision maker should not have a financial interest or pecuniary or relational or proprietary interest in the subject matter of the decision or with those affected by the decision and that where the decision maker has a financial or relational interest with the subject matter or a party affected, the decision maker should recuse or decline to take part and where he fails to do so, the decision is null and void.

In the case of Adzaku v Galanku27, the Court held that:

"A mere suspicion of bias is not enough. The law on disqualification on the ground of bias recognizes not only actual bias but also a likelihood of bias, and that interest, other than the interest of a direct pecuniary or proprietary nature, which gives rise to a real likelihood of bias will disqualify a magistrate".28.

This binding principle requires that the decision-maker has no foreknowledge of the facts of the case. Where the decision maker appears to have such knowledge, the person must recuse himself or be deemed to have been a judge in his own cause. This position was stated in the case of Quist v Kwantreng.29

In the same vein, the Court in the case of Republic v High Court, Denu, Ex Parte Agbesi Awusu II (No 1) (Nyonyo Agboada Sri III Interested Party)30 held that the public decision maker should not pre-determine the issue before the issue is examined. Where the maker has already made up his mind on the decision, it is invalid. Thus, the decision maker should approach the decision with an open mind, relying only on the evidence; and thus, should not enter the arena of conflict.

However, these principles are not without exceptions. The rule is inapplicable where there is a statutory duty or where a constitutional duty is imposed on the decision maker or office holder. Thus, where a statute enjoins the decision maker to perform a particular administrative duty, he or she would not be construed to have an interest that shall prejudice his or her judgment. The cases of Akuffo Addo v. Quarshie-Idun31 and Agyei Twum v. Attorney General and Akwetey32 are instructive in this regard.

Again, where the matter cannot be heard without the decision-maker being accused of likely bias, the principle against bias will not be strictly enforced. Similarly, if the affected party consents, the same holds true. These principles are relevant to all determinations impacting individuals' rights within administrative contexts.

On the basis that the duty to administer tax in Ghana is imposed on the Commissioner-General by Act 915 with no alternative entity designated for this responsibility, it becomes plausible to assert that the Commissioner-General cannot be a judge in his own cause. Therefore, it is grounded in law that regardless of the objection system in place to challenge the decisions of the Commissioner-General, it is important that the Commissioner-General does not breach the principles of natural justice when he hears and determines such objections.

The Kwasi Afrifa case33 responds to the complaint of unfairness in terms of Section 42(5) of Act 915. The Supreme Court reasoned that the provision does not create a fetter to the due process in hearing of the objection because "the law is focused on protecting the tax administration system from abuse by both tax administrators and taxed citizens, rather than preventing the hearing of tax objections. It, therefore, provides a broad spectrum of tools to tax administrators to ease the burden of the demand for prior payments of tax obligations before an objection is heard, and also provides the measurable indicators for exercising that discretion in the two sub-sections following section 42(5)".34

Therefore, a company objecting to an assessment may seek a waiver or variation, or suspension of the requirements of Section 42(5) if it has sound reasons and bound by the duty to be reasonable and not capricious, the Commissioner-General will exercise his discretion in the affirmative. In effect, the burden imposed is necessary to ensure sanity in the system and is proportional as other tools are available to the taxpayer to circumvent the burden of payment of such amounts prior to the consideration of the objection.


Following the Kwasi Afrifa case, tax payers now have clarity as to their rights and the avenues available to them in order to object to decisions of the GRA. The system cannot merely be deemed unfair on grounds that the Commissioner-General hears the objection and the law requires payment of outstanding debts before objections and appeals are heard. The requirement of payment of outstanding debts will not necessarily apply to all objectors due to the import of Section 42(6) and the duty imposed on the Commissioner-General as an administrative body set up by the Constitution to be reasonable and fair.

The inception of the ITAB is a laudable step towards sanitizing the dispute resolution system in the tax administration in Ghana. Systems have been put in place to ensure the successful implementation of the structures that stand the vicissitudes of public life such as undue delays, unnecessary bureaucratic management and corruption.


1. Section 51(1) of Act 915

2. Morse, G. and Williams D. (2000). Principles of Tax Law 4th Edn (Sweet & Maxwell, 2000)

3. Section 101 (4) of Act 896

4. Act 896

5. Section 3 of Act 896

6. Section 37 (1) of Act 915

7. Sections 124 & 126 of Act 896

8. Section 38, Act 915

9. Section 39 of Act 915

10. Section 37(1)(a) of Act 915

11. Section 41 of Act 915

12. Section 42 (1) of Act 915

13. Section 42 (1) & (2) of Act 915

14. Section 42 (3) & (4) of Act 915

15. Section 42 (8) of Act 915

16. Section 42 (5) of Act 915

17. Section 43 of Act 915

18. Section 43(2) of Act 915

19. Act 1029

20. Fourth Schedule of Act 915 (Inserted by Revenue Administration (Amendment) Act, 2020, Act 1029)

21. [unreported] Suit No. J6/02/2022 Delivered on 30 November 2022

22. ibid

23. Act 915

24. Adzaku v Galanku (1974) GLR 197,

25. Dickey W & Fui T, A Look at Administrative Law in Ghana [1972] VOL IX UGLJ 135-172.

26. [1998-99] SCGLR 427 at pages 434-439.

27. (1974) GLR 197.

28. Ibid.

29. [1961] GLR 605.

30. [2003-4] 2 SCGLR 864.

31. [1968] GLR 667, CA.

32. [2005-2006] SCGLR 732.

33. Ibid, at note 21.

34. Ibid, at note 21.

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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