Small Businesses are expected to be exempted entirely from corporate and personal income tax from 2021, according to the National Democratic Congress manifesto for 2020 and beyond.
The Party has said corporate income tax for medium size companies will also be reduced from the current 25 percent to 15percent.
The Party’s manifesto has revealed that newly established medium-sized companies that employ up to twenty (20) staff will be exempted entirely from the payment of corporate income tax for one year.
Other Tax Cut in the NDC’s Manifesto includes:
• Newly established medium companies that employ more than twenty (20) staff will be exempted entirely from the payment of corporate income tax for two years.
# exempt commercial vehicles and other equipment imported into the country for commercial, industrial and agricultural purposes from import duty
# Review the Customs (Amendment) Act, 2020 (Act 1014) to scrap the law banning the importation of salvaged vehicles. This will save the local automotive industry, especially Suame Magazine, Kokompe and Abossey Okai from collapse
# encourages vehicle assembling companies to operate as a complement to local industry e. reverse the decoupling of VAT (12.5 percent), NHIL (2.5percent), GETFund (2.5percent), which has brought untold hardship to Ghanaian businesses and households. The NPP Government in 2018 effectively increased the VAT rate under the guise of decoupling the NHIL rate and the GETFund rate from the value-added tax system and made it a straight levy. Even though the statutory rate remained at 17.5 percent after the decoupling, the effective rate increased from 17.5 percent to 18.5 percent because businesses were not allowed to claim their input VAT for the NHIL and GETFund components of VAT. The NPP effectively introduced a tax through the backdoor f. introduce a Rural Investor Incentive (RII) to create meaningful employment opportunities for the youth in rural areas. This is intended to address the adverse effects of rural-urban migration. Investors in rural communities:
• will be exempted from dividend and capital gain tax
• employing up to fifty (50) persons will be granted tax exemptions and other incentives on the importation of capital equipment.
# provide special tax incentives for indigenous value chain industries such as mineral-processing, petroleum-based, agro-based, and pulp and paper industries, to unlock potential sustainable job opportunities. We will:
# use special tax incentives to maximize the gains from the value chain of indigenous manufacturing activities
# introduce the agriculture value chain tax incentives regime within the first quarter of 2021
# introduces a Tax Support for Export Growth (TSEG) to address trade and balance of payment deficits and also in furtherance of the One Million Jobs Plan.
# Special tax incentives will be offered Ghanaian businesses in the Export-Oriented Industries (EOI) to stimulate exports
# provides the Shipping Industry with special tax incentives to achieve Ghana’s objective of becoming a world-class cargo hub on the West African coast (similar to Singapore). For example, tax incentives, efficient logistics support, safety and security
# revisits Ghana’s international tax policy to protect the tax base and profit shifting. We will:
# develop Ghana’s model tax treaty negotiating manual
# strengthen Ghana’s tax treaties to eliminate transfer pricing
# establishes and equips a new Centre with experts to specifically handle international tax-related issues. Tax Cuts for Jobs (effective 2021).
Source: Mybrytfmonline/Kofi Atakora
