Tax reliefs in Ghana: Here’s what you need to know about them

Ghana has been rocked by a cost-of-living crisis. According to the Ghana Statistical Service (GSS), inflation reached 31.7% in July 2022. By January 2023, it had spiked to a two-decade record high of 53.6%. In July 2023, inflation stood at 43.1%.

In August 2023, the GSS reported that food prices in Ghana had risen significantly to 55%, and energy costs had sharply climbed. Transportation costs have also gone up.

The Public Utilities Regulatory Commission (PURC) in August 2023 announced an increment in utility tariffs effective September 1. The increment is the third hike in utilities in 2023.

In all these, some “controversial” taxes have been imposed on the citizens. For instance, the Electronic Transaction Levy, introduced to impose a 1.5% levy on electronic transfers and revised to 1% later, was greeted with a groundswell of discontent.

The COVID-19 Health Recovery Levy, which critics have said has outlived its usefulness, imposes a special levy on the supply of goods and services, and imports to raise revenue to support COVID-19 expenditure.

The effects of the above taxes coupled with three new ones introduced by the government in the 2023 budget have worsened the financial burden on the public.

However, provisions are made in Ghana’s tax laws for resident individuals to reduce their tax burden.

To be able to apply for any of the reliefs, a resident individual must have resided in Ghana during the taxable year. Reliefs are not monies handed over to citizens but are exemptions granted in their payment of tax.

The reliefs, which come in the form of an allowance, are not granted based on the type of income earned but wholly on the status of the individual and reasons given during application. They are mainly in two forms: upfront tax reliefs and other reliefs.

In this article, Fact-Check Ghana presents tax reliefs available to taxpayers in the country and how they can be accessed.

Upfront tax reliefs

Upfront tax reliefs are granted on a monthly basis to resident individuals and employees as opposed to an annual lump sum relief.

Below are the five upfront tax reliefs:

The Marriage/ Responsibility Relief

This relief is granted to a married man or woman who takes care of the spouse and two or more children. An unmarried person who takes care of two or more children can also apply for this relief. Individuals under this category are entitled to a relief of GH¢ 1,200 per year. Only one spouse (either the husband or wife) is entitled to this relief.

Child Education Relief

A resident individual who pays his or her child’s school fees is entitled to this relief. The relief is granted to a maximum of three children attending any recognized registered educational institution in Ghana. A child under this law includes an adopted child or ward. Only one parent can claim this relief in respect of the same child/children. Each child is entitled to an amount of GH¢600 yearly.

Disability Relief

Disability relief is an incentive for persons with disabilities who are self-employed or employees. This relief is limited to 25% of assessable income from employment and not investment income of individuals in this category.

Old Age Relief

Persons who are 60 years of age and above who earn taxable income are entitled to a relief of GH¢1,500 per year.

Aged Dependent Relative Relief

This relief is for residents who have a dependent relative who is 60 years old and above. The relief covers a maximum of two dependent relatives. However, the spouse or children of the dependant are not entitled to this relief. The relief is GH¢1,000 per year.

Other Reliefs

Educational relief

The educational relief is an amount of GH¢ 2000 that is granted yearly if an individual undergoes training to update his or her professional, technical or vocational skills/knowledge.

Mortgage relief

Mortgage relief is a tax relief that is based on the amount of qualifying mortgage interest that an individual pays on a private residence in a given tax year. The interest is only granted for a single residential building.

How to apply for a tax relief

To access these reliefs, a resident individual, who is a recognized taxpayer, must fill out a prescribed form called the Tax Relief Application Form to the Commissioner General of the Ghana Revenue Authority (GRA). Employers can also file the form on behalf of their employees. However, to benefit from other reliefs that are not upfront, taxpayers are required to file their annual tax return.