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Ghana Parliament Approve Bills for 2023 Budget — Orbitax Tax News & Alerts

On 31 March 2023, the Parliament of Ghana approved several bills containing measures for the 2023 Budget. These include the Excise Duty (Amendment) Bill 2022, the Income Tax (Amendment) (No.2) Bill 2022, the Growth and Sustainability Levy Bill, 2022, and the Ghana Revenue Authority (Amendment) Bill 2022. The main measures are as follows:

  • The implementation of a minimum chargeable income system with a tax rate of 5% on the turnover of businesses consistently declaring losses for the past five years, excluding farming businesses and businesses in the first five years of operation;
  • The unification of the loss carried forward provisions in the Income Tax Act, with all businesses allowed to carry losses forward for 5 years (previously 3 years in general and 5 years for priority sectors);
  • A general restriction on the deduction of unrealized foreign exchange (FX) losses, with the deduction of FX losses limited to actual/realized losses, although FX losses resulting from transactions between resident persons are non-deductible in any case;
  • A specific restriction on the deduction of FX losses of a capital nature, although these may be capitalized and granted a capital allowance;
  • A new withholding tax of 3% for residents and 10% for non-residents on consideration received on the realization of assets and liabilities;
  • A new tax return requirement for the realization of assets and liabilities, which must be submitted within 30 days after realizing an asset or liability;
  • An increase in the concessionary income tax rate for eligible businesses in certain activities/sectors from 1% to 5%;
  • The introduction of an additional top individual income tax bracket with a rate of 35% on income exceeding GHS 600,000 (prior top bracket is 30% on income exceeding GHS 240,000);
  • A new income tax at a rate of 20% on gross gaming revenue of companies involved in lottery, betting, and games of chance;
  • A new withholding tax at a rate of 10% on winnings from lottery, betting, and games of chance;
  • The replacement of the National Fiscal Stabilization Levy (NFSL) with a Growth and Sustainability Levy (GSL) that covers all entities with the following rates:
    • 5% of profit before tax for Category A entities, comprising those paying the NFSL and six additional sectors;
    • 1% of gross production for Category B entities, comprising entities operating in the extractive sector; and
    • 2.5% of profit before tax for Category C entities, comprising all other entities (all other companies);
  • Various excise duty amendments, including an increase in duty rates for certain products, including wine, malt drinks, and spirits, the extension of excise duty to certain products, including sweetened beverages and electronic cigarettes and liquids, and the revision of excise duties on tobacco products.

Further details on the implementation of the measures will be published once available.