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Ghana

Output tax

Advertised prices include VAT and NHIL taxes. Therefore, when prices are charged exclusive of such taxes, VAT and NHIL at 15% (in total) must be added.

Output VAT is calculated by applying the rate of the tax to the VAT-exclusive amount.

Exemptions and zero-rating

Exempt supplies

The exempt supplies, for which no credit is allowed, include (but are not limited to):

  • certain medical and pharmaceutical products;

  • basic food items usually in their raw states;

  • books and newspapers;

  • crude oil and hydrocarbon products;

  • building and construction, including the right to occupy land or buildings;

  • financial services;

  • supply of postage stamps;

  • supply of goods as part of the transfer of business as a going concern by one taxable person to another taxable person;

  • goods for the disabled, i.e. articles designed exclusively for use by the disabled;

  • machinery, apparatus, appliances and parts used in agriculture, industry, mining (as specified in the mining list), railways and tramways;

  • transport by bus and similar vehicles, train, boat and air;

  • education;

  • electricity, excluding domestic consumption up to a minimum level;

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  • water, excluding bottled and

distilled water;

  • fishing equipment; and

  • agricultural inputs.

Special relief applies for:

  • supplies to the President of the Republic of Ghana;

  • supplies for the official use of any Commonwealth or foreign embassy, mission or consulate (relief applies only to VAT on imported goods);

  • supplies for the use of a permanent member of the diplomatic service of any commonwealth or foreign country, exempted by Parliament from the payment of customs duties (relief applies only to VAT on imported goods); and

  • supplies for the use of an international agency or technical assistance scheme where the terms of the agreement made with the government includes exemptions from domestic taxes.

Zero-rated supplies

The zero-rated supplies include (but are not limited to):

  • exports of taxable goods and services;

  • goods shipped as stores on vessels and aircrafts leaving the territory of Ghana;

  • locally produced textbooks and exercise books; and

  • locally manufactured agricultural machinery and other agricultural implements or tools.

Input tax

Input tax allowed

A taxable person may claim input tax on goods and services purchased in Ghana or goods and services imported

by him and used wholly, exclusively and necessarily for business purposes, provided (inter alia) the supply is a taxable supply.

Non-deductible input tax

Input tax deduction is not allowed on the following:

  • purchases or imports in respect of exempt supplies;

  • on the expiration of three years from the date the tax accrued;

  • import of motor vehicles or vehicle parts unless the taxable person is in the business of dealing in or hiring vehicles or selling vehicle parts; and

  • entertainment including restaurant, meals and hotel expenses, unless the taxable person conducts a business of that nature.

Partial exemption

Input tax is restricted to the part of taxable supplies or imported goods that is used for business purposes.

If a taxable person makes both taxable and exempt supplies, a portion of VAT and NHIL incurred may be recovered on the taxable purchases and imports that can be directly attributed only to the taxable supplies made.

Preregistration and post- deregistration VAT

A taxable person may recover the VAT on stock and capital goods purchased or imported prior to registration, provided the goods are still in the ownership and possession of the taxable person and the purchase or importation occurred not more than four months or six months prior to registration in the case of stock and capital items respectively.

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