The Finance Minister, Mr. Ken Ofori-Atta, has stated that the government has reviewed its policy of imposing the 35 percent Income Tax Band on monthly salaries of over GH¢10,000.
Presenting the 2019 Budget statement and Financial Policy on the floor of Parliament on Thursday, November 15, 2018, Mr. Ofori-Atta announced that the government has reviewed the policy due to the concerns of Ghanaians and has pushed the band upwards to affect the income of GH¢20,000 and above.
According to Mr. Ofori-Atta, the government has again reduced the Income Tax Band from 35 percent of high income earners above Gh¢20,000 to 30 percent.
Reading the Budget at the Plenary, Mr. Ofori-Atta pointed out that the government listened to the feedback from the public and came to the conclusion that some relief from the tax measure is justified.
“The 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”, he disclosed.
Mr. Ofori-Atta also announced that minimum wage income earners will no longer attract income tax on their salaries.
He explained that in view of the recent wage increases, wages around minimum wage levels have become partly taxable.
“In keeping with government’s commitment to lighten the tax burden of wage earners at the lower levels of the wage ladder, minimum wage will attract no income tax”, he concluded.
The government’s previous 35% tax imposition
On Thursday, July 19, 2018, the Finance Minister, Mr. Ken Ofori Atta, during the presentation of the 2018 Mid-Year Budget Review at the Plenary, announced 35 percent Personal Income Tax Band on monthly income above GH¢10,000.
He stated that the government reviewed the Personal Income Tax categories to include an additional band of GH¢10,000 and above per month at a rate of 35 percent.
The Finance Minister reiterated that the new band rate needed to be added to Ghana’s current five band graduated income tax rate for individuals.
According to the Mr. Ofori-Atta, the high net-worth income tax was needed to make the rates charged in the country more equitable.
Source: GhanaJustice/S.Ayisi
