Employers have several tax responsibilities, including contributions to the Social Security and National Insurance Trust (SSNIT), Tier 2 and Tier 3 contributions, calculation and payment of these contributions, and other employer contributions such as Workmen's Compensation.

SSNIT Contributions

Employers are required to contribute 13% of each employee's basic salary towards the SSNIT scheme, while the employee contributes 5.5%, making a total of 18.5%. There is a maximum monthly salary on which SSNIT contributions are calculated. This ceiling is adjusted periodically.

Tier 2 and Tier 3 Contributions

In addition to the mandatory SSNIT (Tier 1) contributions, employers and employees can participate in supplementary pension schemes:

• Tier 2: This is a mandatory occupational pension scheme with a minimum contribution of 5% of the employee's basic salary paid entirely by the employer.
• Tier 3: This is a voluntary provident fund and personal pension scheme. Contributions to Tier 3 are tax-deductible up to a certain limit.

Calculation and Payment

Employers are responsible for deducting the employee's share of SSNIT contributions from their salary and remitting the total (both employer and employee portions) to SSNIT. Contributions are due by the 14th day of the following month.

Other Employer Contributions

Employers may need to participate in the Workmen's Compensation insurance scheme, providing coverage to employees in case of workplace-related accidents or injuries.

In Ghana, the income tax system is progressive, meaning that higher-income earners pay a higher tax rate. These tax bands are adjusted periodically. Your taxable income is generally your gross salary and allowances, minus allowable deductions and the minimum tax-free threshold.

PAYE Income Tax

Your employer is responsible for calculating and withholding your Pay As You Earn (PAYE) income tax throughout the year and remitting it to the Ghana Revenue Authority (GRA).

SSNIT Contributions

Employees contribute a mandatory 5.5% of their basic salary to the Social Security and National Insurance Trust (SSNIT) Tier 1 pension scheme. This is directly withheld by your employer.

Other Possible Deductions

If your employer participates in a Tier 2 pension scheme, contributions to this plan are usually deducted from your salary. Contributions to any voluntary Tier 3 pension schemes you've chosen will also be deducted. If you are a union member, your union dues may be deducted from your salary.

Allowable Deductions and Exemptions

There are some potential deductions and exemptions that could reduce your taxable income in Ghana. Interest paid on a mortgage loan for your primary residence is deductible up to a certain limit. Donations to certain approved charities may be deductible. Your employer might provide you with allowances for specific work-related expenses that could be exempt from income tax.

The standard VAT rate in Ghana is currently 12.5%. This applies to most supplies of goods and services within the country, unless specifically exempted or zero-rated.

In addition to the standard VAT rate, Ghana applies the following levies on taxable supplies of goods and services:

• National Health Insurance Levy (NHIL): 2.5%
• GETFund Levy: 2.5%
• COVID-19 Health Recovery Levy: 1%

Certain services are exempt from VAT in Ghana. These include financial services, medical services, educational services (when provided by approved institutions), some transportation services, and rental of residential property.

VAT Registration and Liability

Businesses with taxable supplies exceeding GHS 200,000 over a 12-month period (or less if expected to exceed this amount) are generally required to register for VAT. VAT-registered businesses must charge VAT on their services, collect it from their customers, and file regular VAT returns with the Ghana Revenue Authority.

Services Subject to VAT

These services are generally subject to VAT in Ghana:

• Professional services (e.g., consulting, legal, accounting)
• Telecommunications services
• Hospitality and tourism services
• Maintenance and repair services
• Construction and engineering services

Place of Supply

The place of supply rules determine where a service is considered to be provided for VAT purposes, which is important for establishing whether to charge Ghanaian VAT. In general, the place of supply for services is where the supplier belongs (i.e., has their business establishment). There are specific rules for certain types of services (e.g., those related to immovable property or electronic services).

Invoicing Requirements

VAT-registered businesses must adhere to the following:

• VAT Invoices: Issue tax invoices to customers showing the VAT amount charged and the business's VAT registration number.
• Record-Keeping: Businesses must maintain accurate records of their transactions for auditing purposes.

Businesses can benefit from a variety of tax incentives, which can significantly reduce their tax liability. These incentives can be broadly categorized into general tax incentives, sector-specific tax incentives, location-based tax incentives, and other incentives.

General Tax Incentives

• Capital Allowances: Accelerated depreciation on qualifying capital expenditures can be a significant benefit for businesses.
• Loss Carry Forward: Businesses can typically carry forward losses for up to five years to offset against future profits, thereby reducing their taxable income.
• Tax Holidays: Businesses operating in certain priority sectors may be eligible for income tax holidays (exemptions) for a specific period.

Sector-Specific Tax Incentives

• Manufacturing: Companies located outside of Accra and Tema may enjoy a reduced corporate income tax rate. Additionally, companies involved in specific manufacturing activities may be eligible for tax holidays.
• Agriculture and Agro-processing: Tax holidays may apply to income derived from tree crops, livestock, and fish farming. There may also be exemptions from import duties on agricultural equipment and machinery.
• Tourism: Businesses in the tourism sector may be eligible for import duty exemptions on specific items and income tax holidays.
• Free Zones Companies: Businesses operating within Ghana's designated Free Zones may enjoy several incentives, including corporate income tax exemptions and exemptions from import and export duties.

Location-Based Tax Incentives

• Regional Incentives: Businesses that locate in less developed regions of Ghana may benefit from additional tax incentives, such as corporate tax reductions or exemptions.

Other Incentives

• Export Incentives: Exporters of non-traditional goods may be entitled to a reduced corporate income tax rate.
• Employment Incentives: Businesses that create jobs in certain sectors or regions may receive tax benefits.