On 10 May 2021, the Ghana Revenue Authority published a notice clarifying the implementation of new tax policies in the 2021 Budget Statement and Economic Policy.
This notice confirmed that tax measures such as the 1% COVID-19 Health Recovery Levy, the Energy Sector Recovery Levy and Sanitation and Pollution Levy are applicable as of 1 May 2021.
This notice further confirms that for 2021 only the 5% Financial Sector Recovery Levy (payable in quarterly instalments) will be payable in 3 instalments beginning 30 June 2021.
The Notice provides that 3 new tax laws have been passed and 2 existing laws have been amended:
- Penalty and Interest Waiver Act 2021
- Covid-19 Health Recovery Levy Act 2021
- Financial Sector Recovery Levy Act 2021
- Energy Sector Levy Act 2021
- Income Tax (Amendment) Act 2021
1. Penalty and Interest Waiver Act 2021
- A waiver of penalties and interests on accumulated tax arrears up to December 2020 for persons who decide to pay the principal tax
- The application for the waiver can be done from 1st April to September 2021
- The period of payment of the waiver last until 31st December 2021
- The waiver does not apply to payments and returns due from 1st January 2021
2. Covid-19 Health Recovery Levy Act 2021
- This Act imposes a 1% levy on the supply of goods and services made in the country other than exempt goods or services and import of goods and services other than exempt imports.
- The Levy also applies to the supply of goods subject to the VAT Flat Rate.
- The COVID-19 Health Recovery Levy is not allowable as an input tax deduction
3. Financial Sector Recovery Levy Act 2021
- This Act imposes a 5% levy on the profit before tax of banks
- The tax is payable in quarterly instalments.
- However, for 2021, the levy is payable in three instalments commencing from 30th June 2021.
4. Energy Sector Levy Act 2021
- Section 5A and 5B have been added to the Act.
- 5A – The imposition of an Energy Sector Recovery Levy of GH¢20 pesewas per litre of petrol/diesel and 18 pesewas per kg on Liquefied Petroleum Gas (LPG)
- 5B – The imposition of a Sanitation and Pollution Levy of GH¢10 pesewas per litre of petrol and diesel respectively.
5. Income Tax (Amendment) Act 2021
- This Act amends the Sixth schedule to the Income Tax Act 2015 and provides for a 30% rebate of income tax due for the second, third and fourth quarters of 2021 for taxpayers in the following areas – accommodation and food, education, travel and tours, and arts and entertainment sectors
- A suspension of quarterly income tax instalment payments for the second, third and fourth quarters of 2021 by self-employed persons applying the Income-tax stamp system and owners of taxis and trotros under the Vehicle Income Tax (VIT) system
- To benefit from these concessions, the person must be registered with the Ghana Revenue Authority, made instalment payment for the first quarter of 2021 and continue to discharge any other obligation specified by an enactment administered by the Commissioner-General.