The Ghana Revenue Authority has issued a guidelines providing the framework for the smooth application of tax incentives announced by Government in the wake of the COVID-19 pandemic.
The GRA guidelines on the tax incentives covers the personal emoluments of Health Workers, additional allowances of frontline Health Workers, persons who make withdrawals from Provident Funds or personal pension schemes as a result of permanent loss of employment or capital due to the COVID-19 and donations made towards the fight against the pandemic.
Scope of beneficiaries
Section 7(4) of the Income Tax Act, 2015 (Act 896), under which the Parliamentary approval was granted, requires that the tax liability (exempt amount) be known before the waiver can be granted.
Therefore, the GRA has directed the beneficiary institutions to provide the needed information relative to their exempt amount to their respective tax offices to obtain certification and approval to grant the waiver.
Coverage of the tax incentives, in terms of specific beneficiaries, has been grouped into five categories of health workers.
Beneficiaries under category one are staff of Public Sector Health Facilities on the centralised payroll administered by the Controller and Accountant General (CAG).
However, the GRA says information on this category will be furnished by the Controller and Accountant General (CAG).
The second category of beneficiaries are staff of subvented Quasi-Government Health Facilities. Information on this category could also be acquired through the CAG or the Ministry of Finance.
Staff of public Health Facilities, paid through Internally Generated Funds (IGF), formed the third category.
The fourth category captures staff of Self-Accounting Quasi-Government Health Facilities while the fifth category comprised of staff of Private Sector Health Facilities duly registered by the Ministry of Health.
“All other health workers not captured under the above categories are excluded from the incentives”, portions of the GRA guidelines read.
Scope of tax incentives
The scope of the waiver, according to the GRA guidelines, covers personal emoluments of health workers as stated on their pay slips.
But it excludes other benefits such as bonuses, sitting allowances and honoraria.
On qualification to draw the incentive, the guidelines stated three requirements that the beneficiaries are required to satisfy.
First, the beneficiary health institutions must be registered with the Ghana Revenue Authority and discharging their tax obligations.
Secondly, the qualifying employees of such institutions must have Taxpayer Identification Numbers.
Lastly, the guidelines said “beneficiary institutions which fall under Categories 3 to 5 above are required to continue filing their PAYE returns at their respective tax offices, as they must have already been doing as part of their tax obligations”.
It will be recalled that President of the Republic of Ghana, Nana Addo Danquah Akuffo-Addo, during his April 5, 2020 Covid-19 evening address to the nation, announced a number of packages to encourage and motivate Health workers involved in the fight against the coronavirus pandemic to give off their best.
From the package, front line Health Workers in the combat against the covid-19 pandemic are expected to receive 50% percent of their salaries as allowance.
Aside from this, the Health workers will also not pay tax on their emoluments for three months, beginning this month to June.
Full details of GRA guidelines covering other tax incentives relating to Covid-19 are on the inserted pages below.GUIDELINES-FOR-COVID-19-TAX-INCENTIVES-May-2020
By Salifu B.B. Moro