The Ghana Revenue Authority has urged companies to strictly comply with the Growth and Sustainability Levy Act, 2023 (ACT 1095) alongside the Income Tax Act.

Collins Obeng, a Debt Management Officer at the GRA-Tema Community One Taxpayer Service Centre (TSC), explained that the act is to be imposed as a special levy to raise revenue for the growth and fiscal sustainability of the economy and to provide for related matters.

Obeng advised, during a tax clinic in Tema, marking the GRA’s Tax and Good Governance Month, on the theme: “Transforming for Impact and Growth, Accelerating Domestic Revenue Mobilisation Through Effective Compliance.”

He added that there are three categories of entities liable to pay the levy, stating that Category A will pay five per cent of profit before tax.

The category A companies include banks, non-bank financial institutions, insurance companies, telecommunications companies liable to collect and pay the Communication Service Tax under the Communications Service Tax Act 2008 (754), breweries, and inspection and valuation companies.

Others are oil marketing companies, communication tower operators, companies providing upstream petroleum services, electronic money issuers, shipping lines, maritime and airport terminals, and others.

He noted that Category B entities are expected to pay one per cent of gross production, noting that such institutions include mining companies and upstream oil and gas companies.

Category C companies, he noted, are the ones not captured under A or B and are to pay 2.5 per cent of profit before tax.

He explained that the profit before tax is the accounting profit of the entity as computed under Generally Accepted Accounting Principles (GAAP).

The debt management officer said the scope of application of the levy indicates that it is applied to the specified companies and institutions, despite any provision to the contrary in any agreement or enactment relating to a tax holiday or exemption from direct or indirect tax applicable to a company.

“The levy is not an allowable deduction for the purpose of ascertaining the chargeable income of a person under the Income Tax Act, 2015(Act 896). The levy is payable in respect of profits before tax or production for the 2023, 2024 and 2025 years of assessment,” he said, adding that it is to be amended up to 2028.

He cautioned companies that upon review, examination or audit, if it is detected that a taxpayer has either understated income or overstated cost which affects the net profit before tax as computed by the taxpayer, the net profit before tax shall be adjusted by the amount of any income understated or cost overstated, and the levy shall be applied on the adjusted profit before tax.

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