Income Tax – The Basics

What is Income Tax?

Is a tax charged on a persons’ income from employment, business and investment. Individuals i.e. employee, self-employed, partners in a partnership, shareholders and directors of companies and trustees and beneficiaries of a trust are taxed different from companies and trusts.

 Do you need to pay tax?

Yes, you must pay tax as obliged by law because tax is the resource that government use for national development. This tax come from self-employed persons, companies, partnerships, income of government workers, etc.

How do I pay my taxes if I do not live in Ghana?

  • If you do not live in Ghana but do business with people living in Ghana, such persons will withhold tax from the non-resident person and pay to GRA
  • A person not living in Ghana but owns a permanent place of business in Ghana must pay the corporate tax as it is paid by all businesses

What happens if I do not pay or file my taxes?

  • Sanctions would be applied to a registered taxpayer who defaults in filing/payment, such as interest, penalty compounded.
  • A person earning income but not paying tax would be made to pay taxes owed for all the years of business if you are caught or prosecuted as prescribed by law.

Types of Income Taxes

  • Corporate income tax (CIT)
  • Personal Income Tax (PIT)
  • Pay As You Own (PAYE)
  • Withholding Tax

 How do I register to pay my Income Tax?

  • Visit any Domestic Tax Revenue Division offices near you
  • Complete and submit form and attach relevant Registrar General’s Department business registration
  • Any other documents as demanded by the Commissioner-General