Page 8 - ilovepdf_merged (20) edition 66
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Page 8 Jan-Feb, 2021
INCOME TAX EXPLAINED - THE BASICS
of companies and trustees paid by an employer on behalf year. Companies pay tax on
and beneficiaries of a trust of the employee. The tax is business and investment
are all charged tax on charged on all income of an income known as gains and
income earned. individual in employment, profit. This income does not
whether it is received in include expenses made
Do I need to pay Income benefit or in kind. A monthly while obtaining the income.
Tax? PAYE return must be filed by
You must pay Income Tax if the employer on behalf of Withholding Tax (WHT)
you are an employee, sole employees on or before the It is a tax which is deducted
proprietor or a person in a fifteenth day of the month at source by a withholding
partnership and you earn following the month in which agent (a person required to
income above Gh¢ 261 per the deduction was made. deduct tax) when making
month. payment to another person
Personal Income Tax (PIT) and accounted for later to
How do I pay my taxes if I It is a tax charged on an the GRA.
do not live in Ghana? individual's total income
(income from employment, A registered partnership,
business and investment). company and trust and
You must pay Income Tax if other businesses that make
you are a sole proprietor or a payment to another person
person in partnership and you for goods or services
earn income above Gh¢ 261 bought qualify to withhold
per month. the tax unless the person is
If you do not live in Ghana exempted from paying the
but earn an income in Ghana, t a x . Y o u m u s t b e
you will have to pay the taxes registered to be allowed to
in Ghana. You will have to withhold tax from business
register with the Ghana transactions.
Revenue Authority. If you
live outside Ghana and you Rent Income Tax
earn an income from a It is the tax on income that
business transaction, accrues to someone as a
Income Tax will be paid by result of rental or leasing a
the business. property (residential and
commercial) to another
Types of Income Tax person.
The main types of Income
Tax are: Corporate Income Tax (CIT) Income Tax Stamp
It is a tax charged on a
It is a tax designed for
Pay As You Earn (PAYE) company's total income individuals operating in the
It is a tax deducted from sources at the end of the informal sector, for
employees' income and is company's accounting income example, small-scale self-
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