Ghana: Business Environment

Accounting Rules

Tax Year

The tax year is from 1 January to 31 December. Companies with a financial year that is different from the calendar year are taxed on their financial period that ends during the calendar year.

Accounting Standards

International Financial Reporting Standards (IFRS) are required for both domestic and foreign companies whose securities trade in a public market as well as for the following entities: government business enterprises, banks, insurance companies, securities brokers, pension funds, and public utilities. Non-listed companies can use full IFRS Standards or the IFRS for SMEs Standard.

Accounting Regulation Bodies

ICAG

Accounting Reports

The presentation and preparation of financial statements should be performed in accordance with the Sections 25-31 of the Companies Act. Financial statements must include:

Statement of Financial Position
Statement of Profit or Loss and Other Comprehensive Income
Statement of Distribution
Statement of Cash Flows
Statement of Changes in Shareholder’s Funds
Notes to Financial Statements

Publication Requirements

All companies incorporated in Ghana are required to prepare annual financial statements pursuant to the Companies Act. Listed companies need to prepare annual financial statements in accordance with the Securities Industry Law. Banks must prepare annual financial statements in accordance with IFRS and have them audited. Banks are also required to change audit firms every six years.

Professional Accountancy Bodies

ICAG , Institute of Chartered Accountants (Ghana)

Certification and Auditing

Pursuant to the Companies Act of 1963, all companies registered in Ghana, regardless of size or public interest level, must be audited by auditors registered with the Institute of Chartered Accountants and must file audited financial statements with the Registrar of Companies.

Accounting News

Tax Rates

Consumption Taxes

Nature of the Tax: Value added tax (VAT)
Tax Rate: 12.5%
Reduced Tax Rate: Exports of goods and services, as well as goods and services supplied to Free Zone Enclaves or a Free Zone Company and African textile prints for local textile manufacturers are zero-rated.
Supplies of wholesalers and retailers of goods are taxed at a flat rate of 3%.
Exempt items include: unprocessed agricultural and aquatic products in their raw state, including agricultural and aquatic food products that undergo preservation such as freezing, chilling, smoking, stripping, polishing, etc.; domestic transportation by bus and similar vehicles, and by train or boat; medical services and supplies; agricultural inputs, animals, livestock and poultry; provision of accommodation in a residential property.
Other Consumption Taxes: Excise duties are levied on the following goods: bottled water (17.5%), malt beverages (between 2.5% and 17.5%), beer (between 10% and 47.5%), spirits (between 0% and 25%), tobacco products (175%). A special 2% tax on imports applies to certain products in addition to VAT. An African Union Import Levy of 0.2% on the CIF value is levied on imports from Non-African Union Countries.
A National Health Insurance Levy and the Ghana Education Trust Fund Levy of 2.5% each are levied on goods and services in addition to VAT, together with the COVID-19 Health Recovery Levy (1%).

Corporate Taxes

Company Tax: 25%
Tax Rate For Foreign Companies: Resident companies are taxed on their worldwide income, non-resident companies are only taxed on the income sourced in Ghana.
Non-resident companies that conduct activities in Ghana through a branch are liable to pay a tax of 8% on earned repatriated profits, payable within 30 days.
Capital Gains Taxation: Ghana does not levy a separate capital gains tax; therefore, gains derived by a company are added to business income and are taxed at the standard corporate tax rate.
Main Allowable Deductions and Tax Credits: Depreciation of assets does not yield an allowable deduction when calculating taxable profits. It is replaced by capita allowances at statutory rates varying between 10% and 50%. The tax law does not provide for an explicit deduction of start-up expenses; however, they are usually deductible when they are wholly, exclusively, and necessarily incurred in the production of income. Interest expenses are ordinarily deductible, except in the case of restrictions that apply to thin capitalisation. Bad debts are usually deductible if the taxpayer proves they have taken all steps to pursue payments. Bad debts are not deductible if there is a 50% or more change in underlying ownership.
Charitable contributions to organisations or funds, scholarship schemes and rural or urban development programmes approved by the government qualify for deduction. COVID-19 donations are considered deductible expenses for income tax purposes.
Fines, penalties and taxes are usually not deductible for tax purposes.
Net operating losses can be carried for the three years immediately following the year in which the loss was incurred (up to five years for certain priority sectors). Carryback of losses is also permitted for taxpayers obtaining income relating to a long-term contract (unless there is a 50% or more change in underlying ownership).
Other Corporate Taxes: A Communication Services Tax (CST) is levied at a rate of 5% payable by both individual users and companies providing electronic communications services provided by service providers other than private electronic communications services.
National Health Insurance Levy (NHIL) and Ghana Education Trust Fund Levy (GETFL) at a rate of 2.5% each are levied on the supply of goods and services provided in Ghana, the importation of goods and imported services. These items are also subject to the newly established COVID-19 Health Recovery Levy (CHRL), at a rate of 1%.
Social security contributions payable by the employer amount to 13% of the salary.
Stamp duty is levied at rates ranging from 0.25% to 1% and from GHS 0.05 to GHS 25, depending on the type of transaction and the instrument. A capital duty of 0.5% is levied on the initial stated capital and any subsequent increase in the stated capital.
Business fees are payable annually to local District Assemblies or Municipal Authorities, with rates varying according to the location.
Property tax is levied by the relevant District Assembly/Municipal Authority at varying rates depending on the location.
Other Domestic Resources: Ghana Revenue Authority; Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.

Country Comparison For Corporate Taxation

	Ghana	Sub-Saharan Africa	United States	Germany
Number of Payments of Taxes per Year	36.0	36.6	10.6	9.0
Time Taken For Administrative Formalities (Hours)	226.0	284.8	175.0	218.0
Total Share of Taxes (% of Profit)	55.4	47.3	36.6	48.8

Source: Doing Business - Latest available data.

Individual Taxes

Tax Rate

Personal Income Tax	Pogressives rates from 0% to 30%
From GHS 0 to 4,380	0%
Next GHS 1,320	5%
Next GHS 1,560	10%
Next GHS 36,000	17.5%
Next GHS 196,740	25%
Above GHS 240,000	30%
Non-residents	25% flat tax rate

Allowable Deductions and Tax Credits: The only deductible expenses are social security contributions, qualifying insurance premiums, and donations. Non-business expenses are not deductible. Expenses incurred wholly, exclusively, and necessarily in the production of the income that are subject to tax are deductible.
Annual tax reliefs are provided at varying lump sum rates for certain categories, including an individual with a dependent spouse or two dependent children (GHS 1,200), aged 60 or more (GHS 1,500) and the disabled (25% of assessable income from any business or employment). Professional, technical and vocational training costs give rise to up to GHS 2,000 of tax relief. The first GHS 4,380 are tax-exempt.
Special Expatriate Tax Regime: Non-residents pay taxes at the flat rate of 25% on their Ghana-sourced income.

Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed: See the list of Tax Conventions signed by Ghana
Withholding Taxes: Dividends: 8%, Interests: 0%/8%, Royalties: 15%.

Sources of Fiscal Information

Tax Authorities: Overview of Ghana's tax measures in response to Covid-19
Ghana Revenue Authority
Other Domestic Resources: Domestic Tax Revenue Division

Intellectual Property

National Organisations: Visit this page to find contact information for the Copyright Department of the Ministry of Justice.
Regional Organisations: Copyright Department of the Ministry of Justice is a member of both African Regional Intellectual Property Organization (ARIPO) and World Intellectual Property Organisation (WIPO)

Legal Framework

Independence of Justice

The Constitution of Ghana guarantees the independence of the judiciary. Ghana's judicial independence score, as calculated by the World Bank (World Economic Forum Index), has been rising over the last few years and is now 4.62, putting the country well above both the World median and the regional average. World Justice Project ranks Ghana 43rd out of 113 countries in its latest Rule of Law ranking and first in its region.

Equal Treatment of Nationals and Foreigners

Article 17 of the Constitution guarantees equal treatment before the law.

The Language of Justice

English

Recourse to an Interpreter

All judicial services are provided in English.

Sources of the Law and Legal Similarities

The Ghanaian legal system is heavily influenced by the British rule and has evolved from the British Settlements Act of 1843 to the latest version of the Constitution adopted in 1992. The following are the main sources of law in Ghana:

The Constitution;
Legislation made by or under the authority of the Parliament
Any orders, rules and regulations made by any person or authority under a power conferred by this Constitution (or subsidiary or subordinate legislation)
The existing law or the written and unwritten laws of Ghana that existed immediately before the coming into force of the 1992 Constitution
The common law (or the English common law, English doctrines of equity, and the rules of customary law).

Checking National Laws Online

Ghana Legal

Standards

National Standards Organisations: GSA, Ghana Standards Authority
Integration in the International Standards Network: Ghana Standards Authority (GSA) is a member of the International Organisation for Standardisation (ISO) and the African Organization for Standardisation (ARSO).
Classification of Standards: The Standards Directorate of the Ghana Standards Authority is responsible for the development, publishing and promotion of standards. Ghana uses International Classification for Standards (ICS) and publishes a catalogue of applicable, reviewed and withdrawn standards each year (the latest report can be viewed here).
Online Consultation of Standards: Online Catalogue of Published Standards
Certification Organisations: GSA Ghana Standards Authority

Business Practices

General Information
Opening Hours and Days: Working hours start early in private firms at around 8:00 and can last until 18:30, with the exception of banks that close at 16:00. Public institutions are usually open from 9:00 to 17:00. Stores and some banks may be open on Saturdays from 8:00 to 13:00 whereas most businesses are closed on Sundays.

Public Holidays

New Year's Day	1 January
Constitution Day	7 January
Independence Day	6 March
Good Friday	Friday before Easter Sunday
Easter Monday	Monday after Easter Sunday
May Day	1 May
African Unity Day	25 May
Eid ul-Fitr	Varies according to lunar calendar
Republic Day	1 July
Eid ul-Adha	Varies according to lunar calendar
Founders Day	21 September
Farmer's Day	First Friday of December
Christmas	25 December
Boxing Day	26 December

Holiday Compensation: If a public holiday falls on a weekend the following Monday is declared a holiday.

Periods When Companies Usually Close

Closure for Easter	End of March - Early April
Closure for Christmas	End of December

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