TAXATION AND FISCAL POLICY

MR. JOHN KWAKU AMOH

MR. SEIDU BABA
MR. RESTER TOGORMEY
MR. MICHAEL GIFT SOKU

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 OUTLINE
 Tax Incentives and Investment Policy in Ghana
 Tax Holidays and Tax Exemptions Periods (Industry Concessions)
 Income Exempt from Tax
 Temporary Concessions
 Income Tax Rate for Various Sectors/Businesses
 Carry Forward of Losses – Priority Sectors
 Employment of Fresh Graduates
 Young Entrepreneurs
 Investment Incentives Under The Free Zone
 Incentives for various establishments

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TAX INCENTIVES AND INVESTMENT POLICY
IN GHANA

Government in an attempt to promote growth and

development in certain industries and areas has
provided various tax incentives for those who invest in
these areas or sectors of the economy.

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 TAX HOLIDAYS AND TAX EXEMPTIONS
PERIODS (INDUSTRY CONCESSIONS)
• Some businesses enjoy tax holidays or exemption
periods. During the period of exemption the incomes
are not taxable or taxable at insignificant rates until
the period is over.

• The exemption periods vary and depend mainly on

the type of businesses. These are granted to serve as
incentives for taxpayers.

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 INCOME EXEMPT FROM TAX

(1) The following incomes are exempt from tax:

(a) the salary, allowances, facilities, pension and
gratuity of the President in accordance with Article 68
(5) of the Constitution;
(b)the income of the Government of Ghana or a local
authority, other than income from activities which are
only indirectly connected with the Government or
authority's status as such;

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(c) the income of public corporations, where
(i) that Public corporations is not set up as
commercial ventures
(ii) the income is from an activity that is directly
connected with the status of that public corporation
(d) Pension
(e) A capital sums paid to a person as compensation or a
gratuity in relation to-
(i) personal injuries suffered by the person; or
(ii) the death of another person;

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(f) the income of a non-resident person from a business
of operating ships or aircraft, where the Commissioner-
General is satisfied that an equivalent exemption is
granted by the residence of that person country to
persons resident in this country
(g) the income from cocoa of a cocoa farmer
(h) the income of a person receiving instruction at an
educational institution from a scholarship, exhibition,
bursary or similar educational endowment;

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(i) the income of an individual entitled to privileges to the
extent provided for by-
(i) the Diplomatic Immunities Act, 1962 (Act
148) or a similar enactment; 
(ii) an Act giving effect to the Convention on
the Privileges and Immunities of the United Nations and
the Convention on the Privileges and Immunities of the
Specialised Agencies of the Nations; or
(iii) an Act giving effect to any Convention, treaty
or protocol conferring privileges and immunities on
officers of any AU or ECOWAS office or secretariat or
any agency of the two institutions,

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 (iv) regulations made under an Act referred to
in subparagraph (i), (ii) or (iii);
(j) the income of an individual to the extent provided for
in an agreement between the Government of Ghana and
a foreign government or a public international
organisation for the provision of technical services to
Ghana where-
(i) the individual is a non-resident person or
an individual who is resident in Ghana solely by
reason of performing that service; and

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 iii. the agreement has been ratified by Parliament in
accordance with Article 75 of the Constitution;
(k) the cost of living allowance (other than training
allowance paid in lieu of salary) paid for services rendered
abroad by members of the Ministry of Foreign Affairs and
officers attached to official Ghanaian diplomatic or
consular missions abroad;
(l) The income from a temporary employment of an
individual with the Government of Ghana, where
(i) that individual is not a citizen of the country
(ii) the income is expressly exempt under the
employment contract and
(iii) the income is paid out of the Consolidated
Fund
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(m) the income of an individual from employment in the
public service of the government of a foreign country
where-
(i) the individual is either a non-resident or
resident in Ghana solely by reason of performing that
employment;
(ii) the individual does not exercise any other
employment or carry on a business in Ghana;
(iii) the income is payable from the public funds of
the foreign country; and
(iv) the income is subject to tax in the foreign
country.

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(n) The income of a state-owned or state-sponsored
educational institution 
(o) The income of an institution or trust of a public
character established by an enactment solely for the
purposes of scientific research
(p) interest paid to an individual
(i) by a resident financial institution; or
(ii) on bonds issued by the Government of Ghana; and
(q) the interest or dividend paid or credited to a holder or
member on an investment in an approved unit trust scheme
or mutual fund is exempt

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(r) interest paid to a non-resident person on bonds
issued by the government of Ghana; and
(s) gains from the realisation of bonds issued by the
Government of Ghana by a non-resident person.
(t) gains from the realisation of securities traded on
the Ghana Stock Exchange up to December 31st,
2021.”
(u) the income of an approved unit trust scheme or
mutual fund; and
(v) the income of an approved Real Estate
Investment Trust.
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(2) The Minister may by Legislative Instrument make
Regulations exempting any person, class of person or
income from tax.
(3) Subject to the conditions in Article 174(2) of the
Constitution the Minister may grant a waiver or variation of
tax imposed by this Act in favour of any person
For the avoidance of doubt sub section (3) shall apply only
where the tax liability of the person has already been
ascertained.
Despite any law to the contrary, an exemption shall not be
provided from tax imposed by this Act and an agreement
shall not be entered into that affects or purports to affect the
application of this Act, except as provided for by this Act.

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 TEMPORARY CONCESSIONS
1. Farming
i) Tree Crop - 10 years from first harvest
ii) Cattle -10 years from commencement
iii) Livestock, fish and Cash Crop - 5 years
2. Agro-Processing Business -5 years
3. Companies producing cocoa by-products from cocoa
waste – 5 years
4. Waste processing companies - 7 years
5. Rural Banks -10 years

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6. Real Estates -5 years (Should be done in
collaboration with Ministry of Works and Housing to
provide affordable housing.
7. Gains from the realisation of securities traded on the
Ghana Stock Exchange up to December 31st, 2021.”
8.Free Zones - 10 years
9. Approved Unit Trust Scheme and Mutual Fund-10
years
10. Venture Capital Financing Companies-10 years
11. The income from cocoa of a cocoa farmer-
Indefinite

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 Interpretation
"cash crops" includes cassava, maize, pineapple, rice, and yam;
"cocoa by-product business" means a business that produces on
a commercial basis cocoa by-products using as its main raw
material substandard cocoa beans, cocoa husks and other cocoa
waste; 
"farming business" means the business of producing, crops, fish
or livestock;
"agro-processing business" means the business of processing
crops, fish or livestock produced, caught or raised in Ghana from
their raw state into an edible canned or packaged product; and 
"tree crops" includes coconut, coffee, oil palm, rubber, and shear
nut.

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 INCOME TAX RATE FOR VARIOUS
SECTORS/BUSINESSES

Various incentives are provided in the Income Tax Act,

2015 (Act 896) as amended by way of reduced tax rates.
Prevailing Corporate Tax Rates are as follows:

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• General Corporate Tax Rate 25%
• Hotel Industry 22%
• Income from non-traditional Export 8%
• Financial Institutions
Income derived from Loans granted to a
farming enterprise 20%
Income derived from Loans granted to a
leasing company 20%

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• Manufacturing Companies
Located in Other Regional Capitals of Ghana 18.75%
Located elsewhere in Ghana 12.5%
• Free Zone Enterprise/Developers (after 10 years tax holiday) 15%
• Petroleum Income Tax
35%
• Mineral Income Tax 35%

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• Agro Processing Companies
Accra and Tema (after 5 years) 20%
Other Regional Capitals outside the
Northern Savannah Ecological Zone
15%
• Outside Other Regional Capitals of Ghana 10%
• The Northern Savannah Ecological Zone 5%

In this subparagraph ‘Northern Savannah Ecological Zone’ has

the meaning provided in the Savannah Accelerated
Development Authority Act, 2010 (Act 805).

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 CARRY FORWARD OF LOSSES-PRIORITY SECTORS

For the purposes of ascertaining the income of a person for a

basis period from the following businesses.
(a) Minerals and mining operations;
(b) Petroleum operations;
(c) Energy and power business;
(d) Manufacturing business;
(e) Farming business;
(f) Agro processing business;
(g) Tourism business; and
(h) Information and communication technology business.

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 CARRY FORWARD OF LOSSES-PRIORITY SECTORS

For purposes of sub regulation (1) of Regulation 19

“energy and power business” means a business that is
engaged in power generation;
“information and communication technology business”
means a business that is engaged in software development;
and
“tourism business” means an operator of a tourism
enterprise registered and licensed by the Ghana Tourism
Authority in accordance with section 25 to 27 of the
Tourism Act, 2011 (Act 817).

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 VENTURE CAPITAL FINANCING COMPANY

A loss incurred by a venture capital financing

company from the disposal of share invested in a
venture capital subsidiary company under the
Venture Capital Trust Fund Act, 2004 (Act 684)
during the period of tax exemption granted under
section 11 (5) shall be carried forward for a
period of 5 years of assessment following the
end of the exemption period.

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(a) there shall be deducted, for a period of five years, a
loss of the previous five basis periods incurred by that
person in carrying on that business; and
(b) Where that person has incurred more than one such
loss, the losses shall be deducted in the order in which
they were incurred.
A loss may only be deducted where the loss has not
been deducted in ascertaining the income of that person
for a previous basis period.

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• The loss incurred by a person for a basis period in
carrying on a business shall be calculated as the
excess of amounts deductible under this Act in
ascertaining a profit or gain from the business over
the amounts required to be included in ascertaining
the profit or gain.
• The aggregate deduction from the assessable income
in respect of the loss shall not in any circumstances
exceed the amount of the loss.

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No deduction under this section for any year of
assessment shall exceed the amount, if any, of
the assessable income (included in the total
assessable income for that year of assessment)
from the source of income in respect of which
the loss, which is the subject of the deduction,
was incurred.

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 Employment of Graduates
In calculating a company's income from
conducting a business for a year of assessment,
the company is entitled to an additional
deduction as provided in subparagraph (2) for
salary and wages paid during the year to fresh
graduates from a recognised Ghanaian tertiary
institution.

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Employment of Graduates

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 Young entrepreneur
(1) The income of a young entrepreneur from the
business of manufacturing, information and
communications technology, agro-processing,
energy production, waste processing, tourism and
creative arts, horticulture and medicinal plants shall
be exempt from tax for a period of five years.

(2) The tax rate applicable for the five-year period

after the initial concession period shall be as
follows:

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Tax Rates for Young Entrepreneur

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 CARRY FORWARD OF LOSS

(3) The person may carry forward an unrelieved

loss for a period of five basis periods.

(4) For the purpose of this paragraph, “young

entrepreneur” means an entrepreneur who is not
more than thirty-five years old.”

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 INVESTMENT INCENTIVES UNDER THE FREE
ZONE (FREE ZONE ACT, 1995 ACT 504)
“Free Zone” means an area or building declared as a free
zone by publication in the Commercial and Industrial
Bulletin and includes single factory zones, free port, free
airport, free river or lake port;
“Developer” means a person who acquires a free zone
area and is licensed for its use or uses it for operations
allowed under this Act or rents or sells it or provides
services to enterprises which wish to carry on or are
carrying on business within the zone and includes agents
or sub-contractors of the developers;

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 EXEMPTIONS FROM TAX
Free zone developers and enterprises granted
licenses under the Free Zones Act 1995 (Act
504) is exempt from the payment of income tax
on profits for the first ten years.
The period specified in subparagraph (1)
commences from the date of commencement of
operation.

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EXEMPTION FROM DIVIDEND TAX

A shareholder shall be exempted from the

payment of withholding taxes on dividends
arising out of free zone investments.

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 EXEMPTION OF GOODS FROM
TAXES AND DUTIES
Imports and exports in transit to or from a free
zone shall be exempt from custom duties, transit
duties, tonnage taxes, excise duties and other and
indirect taxes, charges and levies.

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 VAT – ZERO RATED

A supply to a free zone developer or free zone

enterprise, provided that the developer or
enterprise provides satisfactory documentation
that its operations and the procedure for
acquisition of the supply satisfy the requirements
of the Free Zone Act, (Act 870) is Zero Rated

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 GHANA INVESTMENT PROMOTION CENTRE

The Ghana Investment Promotion Centre (GIPC)

was empowered a Legislative Instrument, Ghana
Investment Promotion Centre (Promotion of
Tourism) Instrument, 2005 L.I. 1817 to grant tax
exemptions to certain industries in Ghana.
However, this was repealed in the 2011 Budget.
This is how the Minister for Finance and
Economic Planning captured it

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“In our continuing effort to make policy evaluation and
oversight effective and to improve the institutional
coordination in the way we administer exemptions, it
has become necessary to recommend to the House to
repeal LI 1817 which empowers the Ghana Investment
Promotion Council (GIPC) to grant tax exemptions for
the hotel and hospitality industry.
We will take stock of the relevant incentives, bring
them in line, and incorporate those that are desirable
into Act 592 to be managed by the Ghana Revenue
Authority as was previously the case under the defunct
Ghana Investment Centre”.

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By this the GIPC no longer has the power to grant tax
exemptions on its own but must do that in consultation with
the Ghana Revenue Authority. (GRA). Prior to that these
were the incentives granted.
•List of Establishments and Investment projects and
Applicable Incentives and Benefits
• Accommodation Establishments including hotels, motels,
resorts, guests houses, catering rest houses, serviced flats
and apartments, holiday apartments and other
accommodation establishments as categorized and licensed
with the Ghana Tourist Board.

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ENTERPRISES WHOLLY RESERVED
FOR GHANAIANS
1. The sale of anything whatsoever in a market,
petty trading, hawking or selling from a kiosk at
any place.
2. Operation of taxi service and car hire service.
(A non-Ghanaian may undertake this service
provided he has a minimum fleet of 25 vehicles).
3. All aspects of pool betting business and
lotteries, except football pools.
4. Operation of beauty saloons and barber shops.
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ENTERPRISES WHOLLY RESERVED
FOR GHANAIANS
(5) The printing of recharge scratch cards for the use
of subscribers of telecommunication services;
(6) The production of exercise books and other basic
stationery;
(7) The retail of finished pharmaceutical products;
(8) The production, supply and retail of sachet water;
and
The Minister in consultation with the Board may by
legislative instrument amend the list.

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 Incentives or Benefits for
Accommodation Establishments
Accommodation Establishments including hotels,
motels, resorts, guests houses, catering rest houses,
serviced flats and apartments, holiday apartments and
other accommodation establishments as categorized
and licensed with the Ghana Tourist Board.

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 Exemption from Duties and VAT on Imports
for Accommodation Establishment
Accommodation Establishments including hotels, (a) Exemption from the
payment of customs import duties and other related charges and Value
Added Tax on the following capital equipment, machinery, appliances,
furniture and fittings in the pre-approved quantities to be used in
establishing the project:
i) refrigerators/deep freezers.
ii) Televisions sets
iii) Audio visuals and video equipment
iv) Air conditioners,
v) Public address system,
vi) Furnishing including, resorts, guests houses, catering rest houses,
serviced flats and apartments, holiday apartments and other accommodation
establishments as categorized and licensed with the Ghana Tourist Board.

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Exemption from Duties and VAT on Imports
for Accommodation Establishment
carpets, bedding and fixtures,
vii) Fans,
viii) Bedside & lounge audio visuals and video equipment,
ix) crockery,
x) industrial ovens, cooking ware and cutlery,
xi) computers, printers and servers,
xii) courtesy minibus, passenger or transit vehicles and delivery vans,
xiii) fitness and health care equipment, and
xiv) office equipment. as replacements to the items mentioned in Part
A of this Schedule.

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 INCENTIVES OR BENEFITS FOR CATERING
ESTABLISHMENTS
Catering Establishments, including fast food,
specialized restaurants and other catering
establishments as categorized and licensed by
the Ghana Tourist Board.

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 Exemption from Duty and VAT on Imports for
Catering Establishments

(a) Exemption from the payment of customs

import duties and other related charges and
Value Added Tax on the following capital
equipment, machinery, appliances, furniture
and fittings in the pre-approved quantities to be
used in establishing the project.
i) Industrial ovens, cooking ware (industrial cookers,
microwave ovens, deep fryers).
ii) computers, printers and servers

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 Exemption from Duty and VAT on Imports
iii) public address system,
iv) television sets
vii) office equipment, and
viii) delivery vans
(b) Exemption from the payment of customs import
duties and other related charges and Value Added Tax
on the pre-approved quantities of knocked-down parts
and components, and spare parts to be used as
replacements to the items mentioned in Part A of this
schedule.

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Exemption from the payment of corporate tax
(i) three years tax holiday for catering
establishments situated in Accra or within thirty
kilometers radius from Accra
(ii) four years tax holiday for the same facilities
in regional capitals,
(iii) five years tax holiday for the same facilities
in located elsewhere

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 INCENTIVES OR BENEFITS FOR
TRAVEL AND TOUR ESTABLISHMENT

Travel and Tour Establishments Including

operation of a fleet of tourist coaches and/or
buses and car hire services

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 Exemption from Duties and VAT on Imports
(a) Exemption from the payment of customs import duties and
other related charges and Value Added Tax on the following
capital equipment, machinery, appliances, furniture and fittings
in the pre-approved quantities to be used in establishing the
project:
(i) cars and tourist coaches to be used by operators,
(ii) air conditioners
(iii) furnishing including carpets,
(iv) computers, printers and servers,
(v) office equipment
(vi) server for galileo system and radio communication
equipment.
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 Exemption from Duties and VAT on Imports
(b) Exemption from the payment of customs import duties and
other related charges and Value Added Tax on the pre-approved
quantities of knocked- down parts and components, and spare parts
to be used as replacements to the items mentioned in Part A of this
Schedule.
(c) Exemption from the payment of corporate tax for the following
specified periods:
three years tax holiday for enterprises situated in Accra or within
thirty (30) kilometers radius from Accra
(ii) four years tax holiday for the same facilities in regional capital
and
(iii) five years tax holiday for the same facilities located elsewhere

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 Exemption from Duties and VAT on Imports
(b) Exemption from the payment of customs import duties and
other related charges and Value Added Tax on the pre-approved
quantities of knocked- down parts and components, and spare parts
to be used as replacements to the items mentioned in Part A of this
Schedule.
(c) Exemption from the payment of corporate tax for the following
specified periods:
three years tax holiday for enterprises situated in Accra or within
thirty (30) kilometers radius from Accra
(ii) four years tax holiday for the same facilities in regional capital
and
(iii) five years tax holiday for the same facilities located elsewhere

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 Exemption from Duties and VAT on Imports
(vi) server for galileo system and radio communication equipment
(vii) audio visual and video equipment
(b) Exemption from the payment of customs import duties and other
related charges and Value Added Tax on the pre-approved quantities
of knocked-down parts and components, and spare parts to be used as
replacements to the items mentioned in Part A of this Schedule
(c) Exemption from the payment of corporate tax for the following
specified periods:
i) three years tax holiday for enterprises situated in Accra or
within thirty (30) kilometers radius from Accra
ii) four years tax holiday for the same facilities in regional
capitals,
iii) five years tax holiday for the same facilities located
elsewhere,

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 INCENTIVES AND BENEFITS FOR RECREATION OF
ENTERTAINMENT ESTABLISHMENTS

Recreation of Entertainment Establishments,

including nightclubs, amusement centres, theme
parks, casinos, provision of facilities for hand
gliding and paragliding, water skiing, surfing,
yachting and boating, cruising, angling and other
marine and water based recreational facilities

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 Exemption from Duties and VAT on Imports
of entertainment establishments
(a) Exemption from the payment of customs import
duties and other related charges and Value Added Tax
on the following capital equipment, machinery,
appliances, furniture and fittings in the pre-approved
quantities to be used in establishing the project:
(i) air conditions,
(ii) furnishing including carpets
(iii) computers, printers and servers
(vi) audio and video equipment, and

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 Exemption from Duties and VAT on Imports
of entertainment establishments
(vii) cars and vans to be used by the operators
and organizers.
(v) the development of specialized tourism
ventures in areas such as eco-tourism, heritage or
cultural tourism, historical or emotional tourism and
sports
(b) Exemption from the payment of customs import duties
and other related charges and Value Added Tax on the
pre-approved quantities of knocked-down parts and
components, and spare parts to be used as replacements to
the items mentioned in Part A of this Schedule:
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(c)Exemption from the payment of corporate tax for
the following specified periods:
(i) three years tax holiday for enterprises
situated in Accra or within thirty (30) kilometers radius
from Accra
(ii) four years tax holiday for the same facilities
in regional capitals,
(iii) five years tax holiday for the same facilities
located elsewhere

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 INCENTIVES AND BENEFITS FOR STRATEGIC
OR MAJOR INVESTMENT PROJECT
Strategic or Major Investment Project, which shall be limited
to any other tourism project which the Board, in consultation
with other relevant Government agencies may determine to be
of a strategic or major investment status on the basis of its
potential to significantly impact on the following:
(i) the level of investment in the economy
(ii) employment generation,
(iii) generation of further investments through
linkages with
(iv) increase in tourist arrivals and foreign exchange
earnings.

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 INCENTIVES AND BENEFITS FOR STRATEGIC
OR MAJOR INVESTMENT PROJECT
(vi) the ability to market Ghana’s investment
environment through the attraction of strategic investors
(vii) the realization of Ghana’s branded image, and
(viii) such other objective as the Board may consider
relevant for achieving the objects of the instrument
(a) The benefits and incentives to be granted to
the identified strategic investor shall be as negotiated
by the Board of the Ghana Investment Promotion
Centre.

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 GHANA INVESTMENT PROMOTION CENTRE
(PROMOTION OF TOURISM) REGULATIONS, 2005
In the special case of such projects, the benefits and
incentives to be granted shall be in addition to the
benefits and incentives already provided for under
this instrument and such other relevant incentives
or benefits that are generally applicable to enterprises
under the Ghana Investment Promotion Centre Act

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