The Ghana Revenue Authority has directed the suspension of 1% withholding tax on interest earned by individuals in a press statement issued in Accra today.

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The statement said “we wish to bring to the attention that government has submitted proposals to Parliament for amendment of the relevant sections of the Income Tax Act 2015 (Act 896) to reverse the imposition of 1 percent withholding tax on interest earned by individuals.

“In this regard, financial institutions are directed to suspend the imposition of 1 percent withholding tax on interest earned by individuals,” the statement added.

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.

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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.