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									  2011 Government Budget
Statement: Tax Amendments

  A LAWFIELDS BUSINESS LAW BULLETIN®
              SUPPLEMENT

              MARCH 2011
    DOMESTIC TAXES-DIRECT TAXES

 All amendments, unless otherwise stated,take effect
 from 1st January, 2011

  THRESHOLD OF 5% WITHHOLDING TAX
  ( ACT 814)
 The threshold of the 5% withholding tax on goods
  and services has been increased from GH ¢50.00 to
  GH ¢500.00. Contracts for the supply of goods and
  services exceeding GH ¢ 500.00
    DOMESTIC TAXES-DIRECT TAXES

 ABOLITION OF GENERAL TAX HOLIDAYS
 FOR REAL ESTATE DEVELOPERS (Act 814)
 The general five year tax holiday granted to real
 estate developers is now abolished. It now limited to
 companies which partner the Minister responsible
 for Works and Housing for construction for sale or
 letting of low cost affordable residential premises
 and are certified as such by the Minister responsible
 for construction for sale or letting of low cost
 residential premises and are certified as such by the
 Minister responsible for Works and Housing.
    DOMESTIC TAXES-DIRECT TAXES

 GIFT TAX ( Act 814)
 The tax rate for gift tax has been increased from 5%
 to 15%.

 NATIONAL FISCAL STABILIZATION (Act
 812)
 The National Fiscal Stabilization Levy has been
 extended till the end of 2011
       DOMESTIC TAX-DIRECT TAXES

 PERSONAL RELIEFS (ACT 814)
Personal tax reliefs have been amended as follows:

                       2006 rates (GH ¢)   New rates (GH ¢)
 Marriage/Dependants   35                  100
 Old Age               35                  100
 Children Education (up 30                 100
 to 3)
 Aged Dependants (2)   25                  50
 Training Cost         100                 200
      DOMESTIC TAXES-DIRECT TAXES

 AIRPORT TAX (Act 813)
 (Effective 1st March 2011)
Airport tax has been revised as follows:
Domestic Travel               GH ¢ 5

Regional Travel within West Africa          $ 60

Economy Class Travel outside West Africa           $100
Business Class Travel outside West Africa          $150
First Class Travel Outside West Africa             $200
     DOMESTIC TAXES-INDIRECT TAXES

 . REVISED BUSINESS TURNOVER THRESHOLD FOR VAT/NHIL
   REGISTRATION
  (Act 810)

 All businesses with annual business turnover between GH¢90,000.00 are now
  obliged to operate VAT Flat Rate Scheme (VFRS) charging the tax at a flat rate of 3%

 Businesses, including service providers, wholesalers, manufacturers, etc. that fall
  within this turnover range and currently operate the invoice credit or standard VAT
  systems at 15% will be required to convert to the VFRS.

 All business whose annual turnover exceed GH ¢ 90,000.00 and currently operate
  the VFRS at 3% are now obliged to convert to the invoice credit or standard VAT
  system and charge and account for VAT at 15%.

 The GRA will notify all the affected businesses in writing and indicate
  the date of commencement.
    DOMESTIC TAXES-INDIRECT TAXES

 VAT/NHIL EXEMPTIONS ( Act 810)

  The following items which were zero rated have been re-classified as
  exempt items:

 Locally produced Pharmaceuticals
 Locally produced textbooks and exercise books
 Locally manufactured agricultural machinery and other agricultural
  implements and tools.

 Businesses which solely and principally deal in these items will
  therefore be deregistered from the VAT register. However, in the
  case of locally produced Pharmaceuticals, a list of essential
  ingredients/drugs will in due course be published in consultation
  with key stakeholders.
    DOMESTIC TAXES-INDIRECT TAXES

 VAT ON HAULAGE AND VEHICLE HIRING(Act 810)

  The scope of transportation as an exempt item under the VAT law
  has been narrowed to exclude haulage and vehicle hiring. Haulage
  and Vehicle hiring are therefore now taxable under the VAT law.

 COMMUNICATIONS SERVICE TAX (CST) (Act 754)

  In accordance with the Communications Service Tax (CST) Act
  2008, Act 754, the coverage of CST has been extended to include
  cover the following:
 Public/Corporate Data Operators
 Providers of Radio (FM) broadcasting services
 Providers of Free-to0air television services.
     DOMESTIC TAXES-INDIRECT TAXES

 CUSTOMS DUTIES
Tariff No.   Product Description       Levy GH¢
             Premium                   Not exceeding 8 pesewas Litre

             Kerosene                  Nil
             Gas oil                   Not exceeding 8 pesewas/litre

             Marine Gas Oil(MGO)       Not exceeding 3 pesewas per litre

             Residue Fuel Oil (RFO)    Not exceeding 4 pesewas per litre

             Liquefied Petroleum Gas   Not exceeding 5 pesewas per
             (LPG)                     litre.
             Premix                    Nil
         DOMESTIC TAXES-INDIRECT TAXES

   IMPOSITION ENVIRONMENT EXCISE TAX –
      (Act 809) (NB: Registered Manufacturers whose packaging materials for water and
      minerals water fall within the below list of plastic packaging products must apply to the Commissioner
      General for exemption from the Environmental Tax)
     Manufacturers are to enter and clear such products to a Customs Declaration establishing the claim to this exemption,

      under and appropriate Customs Procedure Code (CPC).


      An Environmental Excise Tax of 20% has been imposed on polythene bags and other plastic
      Packaging materials covered under Chapters 39 and 63 of the Harmonized System and Customs Tariff
      schedules 2007 version. However, this tax will not apply to the plastic packaging materials
      of water and mineral.
      The scope of items covered by this provision is listed in the schedule below:

Heading                       Hs Code                         Commodity                        Rate of Duty
                                                              Description
39.19                                                         Self adhesive sheets,
                                                              films…

39.20                                                         Other plates, sheets
                                                              films…

39.23                                                         Articles for the
                                                              conveyance or packing of
            DOMESTIC TAXES-INDIRECT TAXES

      NEW AD-VALOREM EXCISE DUTY RATE-
         (Act 809) (For the avoidance of doubt, the import excise duty on excisable goods shall be imposed on
         Cost, Insurance and Freight (CIF) basis at the point of importation.
        The Ad-Valorem Excise Duty rates on all excisable goods except on Spirits and Cigarettes have been
         reduced by 2.5%.
        The effect of this is shown per table below:
Tariff No.                       Commodity Description                                 Rate Duty

1.                               Tobacco product:
                                 Cigarette                                             150% of the factory price
                                 Cigar                                                 150% of the factory price
                                 Negrohead                                             The kilogram GH ¢12.00
                                 Snuff and Other tobacco                               170.65% ex factory price

2.                                Beer other than indigenous beer:
                                  In bottles
                                 In kegs                                               47.5% of ex-factory price
                                 Stout                                                 47.5% of ex-factory price
                                                                                       47.5% of ex-factory price

3.                               Wines including sparkling wine                        22.5% of ex-factory price

4.                               Waters, including mineral waters of all description   17.5% of ex-factory price
                                 Distilled, bottled and other packaged water            17.5% of ex-factory price
                                 Malt drinks such as Malta                              17.5% of ex-factory price
         DOMESTIC TAXES-INDIRECT TAXES

     ZERO RATED IMPORTED DUTY IN LIGHT EMITTING DIODE LAMPS (LED) FOR
      DOMESTIC AND PUBLIC LIGHTING-(Act 809) (NB: For the avoidance of doubt, the zero rate
      duty applies to LED lamps for domestic and public lighting only. Other LED lamps for use on motor
      vehicles, portable lamps, and the use on electronic equipment will attract the appropriate duty and
      taxes under sub heading “ other” LED lamps as shown in the table.

     A new national sub division has been created in the 2007 harmonized system and Customs Tariff
      Schedules to admit Light Emitting Diode Lamps (LED) for domestic and public lighting at zero rate
      import duty in conformity with the policy on Energy Saving Lamps. Refer to table below:

Heading              H.S. Code              Commodity              Import Duty            Import VAT
                                            Description
854.70                                      Other machines
                                            and apparatus

                                            Light Emitting
                                            Diode (LED)

                                            For Domestic           0%                     0%
                                            and Public
                                            lighting
   DOMESTIC TAXES-INDIRECT TAXES

 The Ghana Investment Pormotion Centre
  (Promotion of Tourism Instrument 2005 L.I.
  1817 REVOKED (Act 810)
 The Ghana Investment Promotion Centre
  (Promotion of Tourism) Instrument 2005 (L.I. 1817)
  is revoked. This therefore means that Part C of
  Chapter 98 of the Harmonized System and Customs
  Tariff Schedule 2007 Version, which administers
  concessionary duty rate for the inputs of the Tourism
  Industry approved by the Ghana Investment
  Promotion Council, shall no longer apply.
      DOMESTIC TAXES-INDIRECT TAXES

   IMPOSITION OF LEVIES ON POULTRY PRODUCTS AND TEXTILES AND
    TEXTILE ARTICLES
    The import duties, taxes and additional 5% Levy on Poultry products and specified textiles and
    textile articles still applies.
   IMPORT DUTIES ON FOOD ITEMS AND CRUDE VEGETABLE OILS
   The import duty rates imposed oin some specified commodities under the 2010 budget still
    applies.
   REDUCED IMPORT DUTY ON ASBESTOS
   The 5% concessionary import duty rate on Asbestos remains unchanged. A clearance Permit
    from the EPA for all commodities falling under Chapter 25 is required.
   PERIOD FOR WAREHOUSING OF GOODS REVIEWED
   The period allowed for the warehousing and re-warehousing of items have been reviewed
    according to the following categories:
   Perishable                               3 months
   General Goods                            12 months
   Raw Materials                            Up to 2 yrs
   There will be no option for the re-warehousing of general goods. Perishable goods may be
    allowed to be re-warehoused for a limited period of one(1) month upon application and
    approval by the Commissioner.
                  Lawfields Consulting

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