Business people operating in the three northern regional capitals of Tamale, Wa and Bolgatanga will pay only five percent in corporate taxes instead of the normal 25 percent rate.
However, those who have set up in the other seven regional capitals will pay 10 percent in taxes, while those in Tema will pay 20 percent.
This follows the amendment of Act 953, which has also given a five-year tax holiday for young entrepreneurs who are operating in areas such as manufacturing, agro-processing and medicinal plant and are below age 35.
The amendment took effect from January 1, 2018.
Speaking to Goldstreet Business after a seminar held by the Ghana Revenue Authority, (GRA) to sensitize students of the University of Ghana, Legon, Accra on taxes, a lecturer at the GRA Training School, Lawrence Hortsonyame said the policy is to motivate the youth to be independent.
“It is a policy which is backed by law and government wants to encourage a lot of younger people to venture into entrepreneurship and take advantage of the opportunities available to them,” Hortsonyame stated.
He explained further that “if you are a young entrepreneur and you venture into such areas you will not be liable to pay taxes for the very first five years and after the five years you pay at a concessionary rate, which is slightly lower than normal businesses.”
Meanwhile the GRA is asking individuals and organizations to voluntarily disclose the value of gifts they receive either within the country or from outside the country for taxation.
Gifts have been taxable since 2000 when Act 592 was passed, however aside companies who mostly fulfil their gift tax obligations, many people default in the payment.
“Once you have received the gift, the question is whether it is in respect of employment, business or investment. GRA will classify the gift, look for the market value and add it to your income and tax. We expect our tax payers to be very honest and volunteer information on the gifts they receive. And so, when you receive a gift, go to the nearest GRA office and disclose the value for tax purposes.”
In order to meet this year’s revenue target of GHS39.8 billion the GRA is undertaking a vigorous exercise to broaden the tax net and improve revenue collection.
This includes the launch of the Tax and Good Governance Week, which sort to promote Tax Identification Number, TIN, registration, filing of returns and payment of taxes.