It is no hassle, it is not as stressful as it has been perceived to be. It is flexible, straight forward and in the best interest of the nation.
Tax is a state mandated contribution to a country’s revenue, levied by the government on workers’ income and business profits, or added to the cost of some goods, services and transactions.
The Income Tax Act, 2015 (Act 896), explains that a person’s income from employment is all the person’s profits and gains from that employment unless it is specifically exempted by the tax laws.
There are different types of income taxes in Ghana. Namely, Corporate tax, Pay as you earn, personal income tax and others.
For the benefit of our target market and clients, we will throw light on personal income tax. This tax is imposed on self-employed individuals and small business owners in Ghana.
Individuals who pay their personal income taxes are also entitled to personal reliefs within the fifth schedule to Act 896.
This relief is an allowance given to resident individuals in order to reduce their tax burden.
Even though self-employed individuals and small business owners are required to pay their taxes, there has been measures put in place to reduce such tax burdens.
Personal Reliefs in the fifth schedule have been revised as follows:
Old Age: An individual who is sixty (60) years of age and above is entitled to a personal relief of GHc1,500 per year. The individual in question must derive an assessable income during the year from an employment or business. Thus, that individual’s income from an investment is not included. The evidence of the date of birth of the individual in question must be provided.
Marriage/Responsibility : An individual who has a dependent spouse or at least two dependent children is entitled to a personal relief of GHc1,200 per year. A dependent child or spouse means a child or spouse of the individual for whom that individual provides the necessities of life. This relief is granted to only one spouse in a marriage after production of a marriage certificate or certified true copy of the registration of the marriage.
Child Education : An individual who is sponsoring the education of a child or ward in a recognized registered educational institution in Ghana is entitled to a personal relief of GHc600 per child per year up to a maximum of three children or dependents.
Aged Dependent Relative : An individual who has a dependent relative, other than a child or spouse, who is sixty (60) years of age or more is entitled to a personal relief of GHc1,000 per year, but that individual may only claim relief in respect of two dependent relatives. A dependent relative means a relative of the individual for whom that individual provides the necessities of life.
Professional Training Relief : An individual who has undergone training to update his professional, technical or vocational skills or knowledge is entitled to a personal relief which is equivalent to the cost of the training of not more than GHc2,000 per year.
If our clients, other business owners and self-employed individuals remain responsible in paying and filing their taxes, they end up contributing to growth of the economy and to themselves.
Are you a small or medium scale business owner? Do you need to implement a properly structured bookkeeping system? Contact KwekuBookman today to assist you implement this system at an economical rate.