Your guide to doing business in Ghana
Ghana has attracted the attention of international businesses investing in all sectors of the economy. The main sectors of investment within Ghana include agricultural and agro-processing sectors. The financial services and telecommunications sectors are growing rapidly. Further opportunities exist in manufacturing, ICT, tourism, gold, diamonds, and oil and gas. In 2019, Ghana had the fastest growing economy in the world according to the World Bank’s Ease of Doing Business Report.
A company is not required to have a legal entity established in Ghana in order to process payroll.
However, should you want to establish a legal entity in the country, the following steps must be taken:
To process companies’ payroll, the firm will need formal registration of business at Registrar-General’s department and thereafter at the Ghana Revenue Authority.
The documents required for registration with the tax authority are:
A unique computer generated Tax Identification Number (TIN) is given to tax payers for all official transactions.
It is not mandatory to make payments to employees or the authorities from an in-country bank account.
Generally, banks are open to the public from 8.30AM to 4.00PM Monday to Friday. Some banks are open on a Saturday from 8:00AM to 1:00PM.
The working week in Ghana is Monday to Friday.
The working day for commercial offices is usually 8:00AM to 5:00PM. Lunch breaks are usually one hour. Some offices and shops will be open from 8.00AM to 1.00PM on Saturdays. Government offices will not be operational before 9.00AM.
Full Name: Republic of Ghana
Population: 29.77 million (World Bank, 2018)
Major Languages: English, African languages including Akan, Ewe
Major Religions: Christianity, indigenous beliefs, Islam
Monetary Unit: Ghana cedi (GH₵) (GHS)
Main Exports: Gold, crude petroleum, cocoa, manganese ore and palm oil
GNI per Capita: US $4,650 (World Bank, 2018)
Internet Domain: .gh
International Dialling Code: +233
How are you? Wo ho te sen?
Good morning Maa chi
Good evening Maa jo
Do you speak English? Ani owieo Blofo lo?
Good bye Nante yie
Thank you Me daa si
Dates are usually written in the day, month and year sequence. For example, 1 July 2015 or 1/7/15.
Numbers are written with a comma to denote thousands and a period to denote fractions. For example, the total area of the country is 238,535 km2 (two hundred thirty eight thousands five hundred and thirty five km2)
In Ghana, the tax year runs from 1 January to 31 December.
Domestic taxes are administered by the Domestic Tax Revenue Division (DTRD) of the Ghana Revenue Authority. Some of the domestic taxes being administered by the DTRD include:
Value Added Tax (VAT)
Apart from the exempt goods and services, VAT of 12.5% is charged on goods and services made in Ghana and every imported good. A VAT rate of 5% on the supply of immovable property by an estate developer has now been introduced.
National Health Insurance Levy (NHIL)
Apart from the exempt goods and services, VAT of 2.5% is charged on goods and services made in Ghana and every imported good.
Special Petroleum Tax
Licensed oil marketing companies have imposed a special petroleum tax of 17.5% on the supply of specified petroleum products.
Residents are subject to tax on chargeable income accruing in, derived from, brought into or received in Ghana. Non-residents are subject to tax only on chargeable income accruing in or derived from Ghana.
Individuals are considered a resident in Ghana if they;
Non-resident individuals pay taxes at the flat rate of 25%.
Employees in Ghana pay income tax using the Pay As You Earn system. PAYE contributions are withholdings from salaries of employees to satisfy their income tax responsibilities. PAYE is computed with the personal income tax rates.
Tax withheld must be filed and payment made by the 15th of the month following the month in which the tax is withheld.
At the end of each financial year, employers must, no later than 30th April following a financial year, file a return for each employee stating the salary paid to each employee, income exempted from tax, tax reliefs, chargeable income, tax due and tax paid.
The penalties for the failure to pay tax on due dates are:
A further penalty of 5% of the tax and penalty shall be imposed if the total amount remains unpaid.
Taxation of Bonuses
All bonus payments made by the employers to their employees in a year of assessment are taxed at 5% if the payment does not exceed 15% of the annual basic salary of the employee. Where the bonus payment exceeds 15% of the annual basic salary of the employee, the excess will be added to the employment income of the employee and taxed at the graduated tax rate.
Newly Engaged Employees
For newly engaged employees, the company must complete and file form DT107B for each employee.
Disengaged Employees Schedule
For disengaged employees, the company must complete and file form DT107C for each employee.
The Social Security and National Insurance Trust (SSNIT) is a statutory public trust charged with the administration of Ghana’s National Pension Scheme.
The Pension Scheme administered by SSNIT has a registered active membership of over one million and over 100,000 pensioners who collect their monthly pension from SSNIT. This is regulated by the National Pension Act 2008, which is administered by the Social Security and national Insurance Trust (SSNIT).
Employers are expected to ensure that employees in their employment are registered and that contributions are paid on their behalf.
Employees may elect to make additional contributions. There is also voluntary coverage for self-employed persons.
Social security contributions in Ghana are mandatory. Those exempted are:
Payments to the Social Security and National Insurance Trust must be made within 14 days from the beginning of the following month.
An employer who fails to register the company and/or employees will be required to pay all the contribution which should have been deducted from the employees and penalty (3% per month) due from the day they qualified to register.
Employers are required to file yearly tax returns on behalf of their employees within three months after the end of the year.
The deadline for a new employee to be registered with the authorities is their start date as employees.
Upon employment, new hires are required to submit the following to their current employer:
To secure these numbers, new employees need to register with SSNIT, and GRA prior to their employment. This is to ensure that the employer can process the respective statutory contribution of the employees.
Registration with the Bureau of Internal Revenue (BIR) to secure TIN will follow a different process. The employee has to fill out the Application for Registration (BIR Form 1902) and attach a copy of the birth certificate. The employer will submit the form to the Revenue District Office (RDO) where the company is registered.
There is no specific time-scale for paying leavers their final salary payment. The local authorities must be notified of the leaver.