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Business News of Wednesday, 26 January 2022

Source: www.ghanaweb.com

Increase minimum taxable income to GH¢500 - Tax Analyst

Francis Timore Boi is a Tax Analyst Francis Timore Boi is a Tax Analyst

The rich pay more tax in progressive taxation systems, Tax Analyst

Minimum wage in Ghana is too small, Timore Boi

High Net-worth Tax Payers to resolve low taxation of the rich, Analyst


A tax analyst, Francis Timore Boi, has called for the need for government to increase the amount of tax charged on high-income earners by expanding the salary amount that is taxed at zero percent to a minimum of GH¢500.

According to him, this will reduce the burden on low-income earners who end up with close to nothing after they are taxed.

Speaking to Citi Business News on income taxation in Ghana, Francis Timore Boi noted how the rich pay more in progressive taxation systems but the same cannot be said for Ghana especially after the maximum marginal rate was reduced to 30%.

“We know the minimum wage in Ghana is too small. I believe we can expand the income level at which the zero tax is applied, from GH¢365 a month, to around GH¢500. Concerning the taxation of the rich, if you look at every progressive taxation system, you find that the rich pay more. Unfortunately, in Ghana, it is not so. Recently, the maximum marginal rate was taken from 25% to 35%. This was reduced to 30% after public outcry. So the will to tax the rich more seems not to be there.”

Francis Boi, however, believes that the Ghana Revenue Authority's plan to introduce the High Net-worth Tax Payers' policy will bring an end to the low taxation of the rich.

In his words, “Currently we are aware that the GRA is designing a measure called the ‘High Net-worth Tax Payers’ which focuses on taxing the wealthy in Ghana. We believe that, that may come to resolve the issue of low taxation of the rich."

Meanwhile, employees who receive GH¢365 and below as monthly salary or ¢4,380 as annual salary do not have their earnings taxed.

This follows the amendment (no. 2) of the Income Tax Act, 2021 (Act 1071).

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