"Gov’t introduces new income tax bracket to boost revenue"

" Gov't introduces new income tax bracket to boost revenue \r\n\r\nGhana's income tax system has undergone a significant overhaul with the introduction of the Income Tax (Amendment) Act, 2023 (Act 1094). This amendment brings several changes to the country's income tax system, with the introduction of an additional income tax bracket being one of the most significant.\r\n\r\nUnder the previous system, the highest tax rate was capped at thirty percent (30%) for individuals earning annual incomes exceeding GHS240,000. However, with the introduction of Act 1094, the highest income tax bracket has been raised to thirty-five percent (35%) for individuals earning annual incomes exceeding GHS600,000. This move is aimed at increasing tax revenue and ensuring that high earners in the country contribute their fair share towards national development.\r\n\r\nIn addition to the introduction of a new income tax bracket, Act 1094 also revises the rates of income tax for individuals. The amendment also introduces a minimum chargeable income of 5%. This is aimed at ensuring that even low-income earners pay their fair share of taxes. Any income earned above this threshold will be taxed based on the applicable tax rates.\r\n\r\n List of annual income and their corresponding tax rates \r\n\r\n \r\n\r\nMoreover, Act 1094 imposes a withholding tax on the realisation of assets and liabilities and on winnings from lotteries. This is expected to generate more tax revenue and prevent tax evasion. The treatment of foreign exchange losses has also been revised, providing more clarity on how such losses should be treated for tax purposes. This will ensure that individuals do not take undue advantage of such losses to avoid paying their fair share of taxes.\r\n\r\nAdditionally, Act 1094 revises the upper limits for the quantification of motor vehicle benefits. The government has identified the use of company-owned vehicles for personal purposes as a significant avenue for tax evasion. By increasing the upper limits, the government hopes to discourage this practice and generate more tax revenue.\r\n\r\nThe introduction of the Income Tax (Amendment) Act, 2023 (Act 1094) represents a significant milestone in Ghana's tax system. It is expected to generate more revenue for the government, which can be channelled towards development projects and social services. However, the government must ensure that the tax system is fair and equitable for all citizens, taking into consideration the impact on different segments of the population.\r\n\r\nIt is also crucial to ensure that the revenue generated from these changes is utilised effectively for the benefit of all citizens. The government must focus on providing essential services, such as healthcare, education, and infrastructure development, to uplift the living standards of Ghanaians. By striking a balance between revenue generation and social equity, Ghana can achieve sustainable economic growth and development."

"Gov’t introduces new income tax bracket to boost revenue"

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