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Fresh Graduate Tax Incentives

December 21, 2019

Has your company employed fresh graduates in the 2019 year of assessment? Then you may be qualified for additional tax deductions when determining chargeable income for the aforementioned year of assessment.

 

Section 8 of the Sixth Schedule of the Income Tax Act 2015 (Act 896) states that;

 

‘In calculating the income of a company from conducting a business for a year of assessment, the company is entitled to an additional deduction as provided in subparagraph 2 for salary and wages paid during the year to a fresh graduate from a recognised Ghanaian tertiary institution’’

 

The tax deductions are under listed:
 

Percentage of Fresh Graduates in Workforce                         Additional Deduction

 

Up to  1 percent                                                                                            10 percent of wages and salaries

 

Above 1 percent but not more than 5 percent                                       30 percent of wages and salaries

 

Above  5 percent                                                                                          50 percent of wages and salaries

 

The Income Tax Act also defines fresh graduate as a person who has graduated from a tertiary institution for the first time whether or not that person was previously employed.

 

Therefore, as a company you can optimize your tax liability by this incentive.

 

___________________________________________________________________________________________________

 

Richard Dwumor is the Managing Partner of RDK Consulting Services and a member of CIT, ICAG and ACCA.

 

 

 

 

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