Taxes
Stressing
You Out?

Yes — and this is one of the most significant changes under Act 1151. From 1 January 2026, supplies of services to Free Zone enterprises and developers are now subject to standard-rated VAT at 20% (VAT 15% + NHIL 2.5% + GETFund 2.5%). The old zero-rating exemption for such services has been removed.

A Form 9 issued by the Ghana Free Zones Authority is a customs and investment exemption instrument — it does not override the new VAT Act. The VAT obligation is now imposed directly on the supplier by Act 1151, and a Form 9 does not constitute a VAT exemption under the new law. Service providers supplying into Free Zones who were previously relying on Form 9 to treat those supplies as exempt or zero-rated must immediately re-assess their position. Failure to charge and account for VAT on such supplies exposes the supplier to back-tax, penalties and interest. Contact us if your business is affected.

Under Act 1151 (effective 1 January 2026), the rules differ sharply depending on what you supply:

Goods suppliers: Must register when annual turnover exceeds GHS 750,000 (raised from GHS 200,000).

Service providers: There is no turnover threshold. Any person who begins supplying taxable services in Ghana must register within 30 days of commencing, regardless of how small the business is. This is a critical change that catches many small service businesses off guard.

Both result in no VAT being charged to the customer — but they are very different for the supplier:

Zero-rated: VAT is charged at 0%, but the supplier is still VAT-registered and can claim input VAT credits on their purchases. Examples include exports and locally manufactured textiles (until December 2028).

Exempt: VAT does not apply at all, and the supplier cannot claim input VAT credits. Examples include basic foodstuffs, healthcare, and educational services.

Misclassifying a supply can result in either overclaiming input tax (zero-rated vs exempt) or overcharging customers. Always verify the correct classification with a tax adviser.

Both have separate obligations — and this is where many businesses make costly mistakes:

VAT: If the landlord is VAT-registered (or required to be), they must charge VAT at 20% on commercial rent. The landlord is responsible for collecting and remitting this to GRA. The tenant pays it as part of the rent.

Withholding Tax (WHT): The tenant (if a company or registered business) is required to withhold 15% on commercial/non-residential rent payments and remit to GRA by the 15th of the following month. For residential rent the WHT rate is 8%.

So on a commercial rent payment, both VAT (landlord obligation) and WHT (tenant obligation) can apply simultaneously. Getting this wrong from either side leads to penalties. Contact us for help structuring your lease correctly.

Yes — and the penalties are serious. Under the Revenue Administration Act (Act 915), the law imposes the following penalties for record-keeping failures:

• Failure to keep required records: GHS 5,000 for every month or part of a month the failure continues.
• Failure to produce records when GRA requests them: GHS 10,000 for every month or part of a month.
• Falsifying, destroying or concealing records: GHS 50,000 OR imprisonment for up to 2 years, or both.

Beyond the penalties, poor records leave you defenceless during a GRA audit. GRA can issue a Best of Judgement (BOJ) assessment, estimating your income based on industry data — which is almost always higher than your actual liability. Proper records are your best protection. Let us help you set up clean books.

Do not ignore it — ignoring a GRA assessment makes it final. Here is the formal process under the Revenue Administration Act (Act 915):

Step 1 — Lodge a formal objection with the Commissioner-General within 30 days of receiving the assessment. The objection must be in writing and state clearly the grounds on which you disagree.

Step 2 — Pay the required deposit: You must pay 30% of the disputed tax amount plus all undisputed outstanding taxes before your objection will be considered. (For import taxes, 100% must be paid.)

Step 3 — GRA reviews your objection and either agrees with you (in which case the 30% is refunded/credited) or upholds the assessment.

Step 4 — If still dissatisfied, you can appeal to the Independent Tax Appeals Board (ITAB) within 30 days, and further to the courts if needed.

Act early — the 30-day window is strict. Contact us immediately if you receive a GRA assessment you believe is incorrect.

Yes. Filing a return and having tax to pay are two separate obligations. Companies and self-employed individuals must file annual returns regardless of whether they made a profit or a loss. Losses must be formally declared to be eligible to carry them forward and offset against future profits (up to 5 years under Act 896). If you don't file, GRA may issue a Best of Judgement assessment assuming profit.

Missing a deadline triggers two things:

Late filing penalty: GHS 500 immediately, plus GHS 10 for every additional day the return remains unfiled.

Late payment interest: 125% of the Bank of Ghana's prevailing monetary policy rate, compounded monthly on any unpaid tax. This can accumulate quickly and significantly exceed the original tax amount.

The best approach is always to file on time — even if you cannot pay in full. Filing without payment stops the late-filing penalty clock, and you can then negotiate a payment plan with GRA. Contact us if you have outstanding returns.

They are the same tax — just collected differently:

PAYE (Pay As You Earn) is the mechanism by which employers deduct income tax from employees' salaries every month and remit to GRA on their behalf. The employee never has to file monthly — the employer does it for them.

PIT (Personal Income Tax) is the annual return that individuals file by 30 April each year to reconcile their total income tax for the year — including any non-employment income (business income, rent, investments). For most salaried employees whose only income is their salary, the PAYE deducted throughout the year should match their PIT liability.

This is one of the most common misunderstandings, and it catches many businesses off guard. Filing and payment are two completely separate obligations.

Filing means submitting your tax return or declaration to GRA — telling them what your income, deductions and tax liability are for the period. It is a reporting obligation.

Payment means actually transferring the tax money to GRA.

You can pay without filing — and still be penalised for not filing. You can also file without paying — and be charged interest on the unpaid tax. Both must be done, and both have deadlines.

For example, a business may have paid its PAYE every month but forgotten to submit the monthly PAYE return — GRA will still charge a late filing penalty of GHS 500 plus GHS 10 per day. Similarly, filing your annual return without paying the tax due triggers 125% interest compounded monthly.

The safest rule: always file first, then pay. If you cannot pay in full, file on time anyway to stop the filing penalty clock, then arrange a payment plan with GRA. Contact us if you need help getting compliant.

No — and this is a very costly misconception. Assembly payments and GRA taxes are completely separate obligations under different laws, administered by different authorities.

District/Municipal Assembly Levies (e.g. BOP): These are local government fees and permits governed by the Local Governance Act. They are paid to your Metropolitan, Municipal or District Assembly (MMDA) and go towards local services — roads, sanitation, street lighting. A Business Operating Permit simply gives you permission to operate in that locality. It is not a tax receipt.

GRA Taxes: These are national taxes administered by the Ghana Revenue Authority under Acts of Parliament — Income Tax Act (Act 896), VAT Act (Act 1151), etc. They include Income Tax, PAYE, VAT, WHT and Corporate Tax. They go to the national consolidated fund.

Paying your BOP does not discharge any GRA obligation, and GRA does not recognise Assembly levies as tax payments. A business must comply with both independently.

Other common payments that do NOT replace GRA taxes: SSNIT contributions, EPA permits, FDA registration fees, NCA levies, Ghana Standards Authority fees — all separate from income and VAT obligations. Not sure what you owe GRA? Contact us for a compliance review.