Internal Revenue ACT, 2000 (ACT 592) charges any person who earns
income from employment, business and investment to pay tax on a
If you are an employee, then your salary is subject to tax under
the 'PAY AS YOU EARN" (PAYE) system. 'PAYE' is the routine
deduction of tax at source from your income whenever you are paid.
The 'PAYE" system was introduced in Ghana from July 1, 1961.
The rationale for its introduction is two fold :-
It is a means for government to ensure that all salaried workers
who are eligible to pay tax do so, thereby revenue flows constantly
into the national coffers, and
2. By deducting tax at source the tax burden is spread over the
tax year and therefore becomes lighter and tolerable for the employee.
PERSONS AND COMPANIES
In the case of a self-employed person or a company, income tax is
paid at specified rates based on annual assessments made by the
Commissioner, Internal Revenue.
Identified companies with good tax records have been given the options
tax payable for a Year of Assessment is payable in four equal installments
by the end of the third, sixth, ninth and twelve month of your 'basis
This is a period of twelve months or less which determines the income
assessable to tax in a particular Year of Assessment.
the coming into force of the Internal Revenue Act 2000, (Act 592)
individuals, partnerships and companies or body of persons could
choose their own accounting dates. However, with the enactment of
Act 592, all individuals and partnerships are required to adopt
the government's accounting dates of 1st January to 31st December
of the same year as their 'basis period'.
The Year of Assessment is from 1st January to 31st December of the