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.