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Are you a Taxpayer?
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Do you have tax deducted from your salary any time you are paid?
If you answered yes to any of the above questions, then you could qualify for one or more
of the tax reliefs.
Now read on!
The Internal Revenue Act, 2000 (Act 592) charges employees, self employed persons and
companies to pay income tax on a yearly basis on their incomes from employment,
business and investment.
EMPLOYEES
If you are an employee, your salary is subject to tax under the PAYE system. ‘PAYE’
(Pay As You Earn) is the routine deduction of tax at source from your income every time
you are paid.
PAYE
The rationale for the introduction of the PAYE system is two fold:1
.It is a means for government to ensure that all salaried workers who are eligible
to pay tax do so, thus ensuring continuous flow of revenue into the national
coffers.
2.
By deducting tax at source the tax burden is spread over a longer period and there
becomes lighter and tolerable for the taxpayer.
SELF-EMPLOYED
In the case of self-employed persons, Income Tax is paid at specified dates based on
annual assessment made by the commissioner.
You are required to pay your tax in four installments by the end of each quarter; that is
March 31, June 30, September 30 and December 31 of every year.
YEAR OF ASSESSMENT
The year of assessment for Income Tax purposes is from January 1 to December 31,
every year.
WHAT IS A TAX RELIEF?
A Tax relief is an approved deductible allowance intended to reduce your taxable income
and there by lessen your tax burden.
The relief is granted against your assessable income.
Your personal circumstances are always taken into consideration. For example, a married
person with children attending school will normally be more hard pressed than a person
who is single and has no responsibilities.
Therefore in all progressive tax administrations, as obtains in Ghana, your position in
relation to your commitments is considered by granting you relief’s to lighten the burden.
TYPES OF RELIEFS
If you declared your personal situation and applied for all reliefs, you could qualify for
any of the following:
1.
MARRIAGE/RESPONSIBILITY RELIEF
This relief is granted to an individual with a dependant spouse or at least two
dependant children.
The relief is GH ¢30.00 per annum.
2.
CHILDREN’S EDUCATION RELIEF
i.
This is grated on a maximum of three children attending any recognized
registered educational institution in Ghana. A child under this law includes
an adopted child or ward.
ii
Both parents cannot claim this relief in respect of the same child/children
iii
The relief is GH ¢ 30.00 per child per annum
3.
i
DISABLED RELIEF
This is granted to persons who prove to the satisfaction of the Commissioner
that they are disabled.
ii
This relief is granted to disabled persons who receive income from business
and employment only.
iii
The relief is 25% of the Disabled person’s income from business and/or
employment.
4.
OLD AGE RELIEF
i
This relief is granted to persons who are 60 years and above and are still in
employment or business
ii
It is granted on income from business and employment only.
iii
The relief is GH ¢30.00 per annum
5.
AGED DEPENDENT RELIEF
i
You will enjoy this relief if you prove to the satisfaction to the Commissioner
that you have an aged relative who is dependent on you.
ii
It is granted on a maximum of two dependants who are 60 years and above.
iii
The relief does not apply to a dependant’s spouse or child.
iv
Two persons cannot claim this relief in respect of the same aged dependant.
v
The relief is GH ¢ 25.00 per relative per year.
6.
PROFESSIONAL/SELF IMPROVEMENT RELIEF
i
This relief is granted to persons who have undergone any training to update
their professional, technical or vocational skills or knowledge.
ii
The relief is GH ¢ 100.00
7.
LIFE ASSURANCE RELIEF
If you insure your life as a taxpayer you will be granted this relief but with the
following restrictions.
i
The relief shall not exceed 10% of the sum assured.
ii
The annual premium paid is allowed as relief provided it does not exceed 10%
of your income.
iii
The premiums are paid in Ghana currency.
iv
The scheme must be invested in Ghana
8.
SOCIAL SECURITY RELIEF
This relief is granted to employees as well as self employed persons who
contribute to the Social Security Scheme in Ghana.
i
Your contribution as an employee shall not exceed 5% of your total
emoluments.
Your contribution as a self employed person shall not exceed 17.5% of your
income from business.
ii
UPFRONT GRANTING OF RELIEFS ACT 592 grants the following reliefs upfront:1.
2.
3.
4.
Marriage/Responsibility
Children’s Education
Old Age
Disabled
You can apply by completing the TAX RELIEF APPLICATION FORM (IT 21A)
WHO QUALIFIED FOR A TAX RELIEF?
Every individual taxpayer is qualified to put in a claim for a tax relief.
You must complete and submit your tax returns to the nearest IRS District Office to
qualify for a tax relief.
HOW DO I CLAIM TAX RELIEF?
i
You are required to complete and submit and Income Tax Return Form (IT 21A)
by the end of April every year.
ii
If you are an employee with only employment income your employer will
complete and submit the Tax Relief Application Form (IT 21A) on your behalf.
iii
If you are a self-employed person, submit the form (IT 21) to the IRS District
Office nearest you.
WHEN SHOULD I PUT IN A CLAIM?
i
Annual returns must be filed not later than four (4) months after the end of the
Assessment Year (ie 30th of April of the following year).
ii
The Year of Assessment is the Income Tax year. It coincides with the
Government fiscal or budget year. ie from 1st January to 31st December, of the
same year,
REMEMBER

You must call at the Tax Office nearest you to collect the appropriate forms for
completion.

Submit the completed forms to the nearest Tax Office.

It is only when file your annual tax returns that you can claim the reliefs.
See Brochure IRS 07 for addresses of tax Offices
Visit our website : http://www.gra.gov.gh
E-mail: [email protected]
These notes do not cover every point but any Tax Office will be pleased to assist you.
IRS Your partner in National Development