Backtrack: Gov’t reverses 1% tax on investment

The tax imposition on interests is part of provisions in the new Income Tax Act, 2015 (Act 896) which came into force on January 1, 2016. 

  • Published:
24/7 Live - Subscribe to the Pulse Newsletter!

The Ministry of Finance has submitted proposals to Parliament to reverse the 1% withholding tax on local investors its imposed last week.

The tax imposition on interests is part of provisions in the new Income Tax Act, 2015 (Act 896) which came into force on January 1, 2016. 

Under the new law, local investors were required to pay 1% Withholding Taxes on their returns. This means that all interests accruing from investment in bonds, treasury bills and shares will be reduced by 1%, an amount which will be paid to government.

Following the imposition of the tax, there was huge public outcry over the issue after banks and financial institutions sent SMS alerts to their customers about the provision and how it would affect them.

But a statement issued by the Minister of Finance, Mr Seth Terkper, said that the government had taken note of the concerns of taxpayers and the general public on some provisions of the Act, particularly those relating to withholding tax on the provision of services and the payment of tax on interests paid to individuals.

“On the issue of the imposition of a 1% tax on interest earned by individuals, Government has already submitted proposals to Parliament to reverse the position,” the statement said.

The essence of the withholding tax regime on services is to improve tax compliance. It is not a final tax but a payment on account. Therefore, the increase in withholding tax on services to 15 per cent is to encourage taxpayers to file their returns, after which they will be entitled to a credit for the amount withheld,” the statement explained further

Do you ever witness news or have a story that should be featured on Pulse Ghana?
Submit your stories, pictures and videos to us now via WhatsApp: +233507713497, Social Media @pulseghana: #PulseEyewitness & DM or Email:

Recommended Articles

Recommended Videos

Top Articles

1 Menzgold Ghana Don't deposit money with Menzgold – BoG cautions public againbullet
2 MoMo Ghanaians to make int’l payments with mobile money as MTN...bullet
3 Banking In Ghana Ghanaian banks resist the use of crypto currencybullet
4 2018 World Happiness Report Somalia is a happier place to live...bullet
5 Nepotism In Ghana NLA boss awards sister-in-law 11 contracts in...bullet
6 Salaries In 2018 Here are the dates public workers will be...bullet
7 Prisons Recruitment Prison Service extends recruitment exercisebullet
8 Menzgold Ghana Investment company closes down its Gold...bullet
9 Nima Flagstaff House We'll return to vote for you in...bullet
10 Police Service Debt Vodafone cuts off line to Ghana...bullet

Top Videos

1 New Discovery Ghana discovers new mineral, lithium in commercial quantitiesbullet
2 Support Finance minister buys Kantanka carbullet
3 Money Alert Meet Africa's richest womanbullet
4 Forbes 2018 Africa's billionaires rich listbullet
5 New Phone Nokia’s MWC 2018 Event in Under 10 Minutesbullet
6 Dr Joseph Siaw Agyepong Nobody can collapse my company – JOSPONGbullet
7 Plane Crash Starbow suspends operations following plane crashbullet
8 Bozoma Saint John 10 quotes from Uber top official,...bullet
9 New Phone Nokia’s MWC 2018 event in 7 minutesbullet
10 Tech 6 reasons you should buy an iPhone SE instead of...bullet