The government has reviewed its policy of imposing a 35% tax on income over 10, 000 Ghana cedis.
The Finance Minister, Ken Ofori-Atta, in July this year announced that a new band rate needs to be added to Ghana’s current five band graduated income tax rate for individuals.
According to the Finance Minister, the new high net-worth income tax was needed to make the rates charged in the country more equitable.
But reading the 2019 Budget statement and Financial Policy on the floor of Parliament Thursday, Ofori-Atta announced that the government has reviewed the policy due to concerns of Ghanaians and has pushed the band upwards to affect income of 20, 000 Ghana cedis and above.
“Government in the midyear review introduced an additional personal income tax band of GH¢10,000 and above per month at a rate of 35 percent. We have listened to the feedback from the public and come to the conclusion that some relief from this tax measure is justified.
“Accordingly, Government proposes to review this band to impact monthly income above GH¢20,000 at a rate of 30 percent. Mr. Speaker, we will bring the necessary changes to this august house to be legislated.”
Mr. Ofori-Atta also announced that minimum wage income earners will no longer attract income tax on their salaries.
“In view of the recent wage increases, wages around minimum wage levels have become partly taxable. In keeping with government commitment to lighten the tax burden of wage earners at the lower levels of the wage ladder, minimum wage will attract no income tax.”