All payments from employers to casual and temporal workers in Ghana for any work done is to be taxed by five percent, following the passage of the legislative Instrument(LI) under the country’s Income Tax Act, 2015, Act 896 into law.
The Ghana Revenue Authority (GRA) will clarify taxes that must be imposed on class one workers.
The law would remove all challenges hindering the taxation of casual and temporary workers, according to the Deputy Commissioner in-charge of Policy and Programmes at the GRA, Edward Gyamerah.
“The law is very clear. Previously, we had challenges to what rate should be applied to class one labour or the temporary labour. Some were of the opinion that tax on service should apply that is 7.5 percent, some were of the opinion that the graduated rate should apply,” he told participants at forum dubbed ‘Meet-The-Regulators Series’ in Accra. The forum was organised by Ernst and Young, a leading global consultancy.
He assured workers that only 5 percent would be taxed from their money as stated by the law.
For a casual worker defined under the Labour Act, the tax rate that should be applied to the payment of the casual worker is 5 percent, Mr Gyamera stated. Casual work comes under section 78 of the Labour Act, which means that employers must uphold 5 percent of money paid to casual labourers and pay same to the GRA.
“If the person is a temporary worker which means his salary is determined for a certain period which normally is paid at the end of the month, they should be taxed in line with the standard provision i.e. you go to Section 1 and you use the individual rates to tax them,” he said.
Also, LI has also clarified five of the reliefs that could now be granted upfront.“These include marriage and responsibility relief, child relief, old age relief, aged dependent relative relief and disability relief,” Mr Gyamera stated.
Unlike five months ago where workers applied for the tax relief card every year, workers can now apply and be granted the relief before filing tax returns, told the participants.
African Eye Report
