GRA outlines who qualifies for Modified Taxation Scheme and how it works

The Ghana Revenue Authority (GRA) has outlined the categories of taxpayers eligible for the Modified Taxation Scheme and those who are excluded from it. Chief Revenue Officer Victor Yao Akogo explained the scheme during a discussion on Joy FM Super Morning Show. The scheme primarily benefits resident individuals with business income, especially those in the informal sector.

To qualify, an individual must be a Ghanaian resident earning business income from the country and not registered for Value Added Tax (VAT). The scheme is relevant to people operating in the informal sector with annual turnover not exceeding GH₵750,000. However, professionals like engineers, accountants, and lawyers are excluded due to their regulation and ability to maintain business records.

The Modified Taxation Scheme consists of three categories. The first category involves taxpayers with annual business income up to GH₵20,000, who pay a fixed amount of 45 Ghana cedis quarterly. The second category comprises individuals with annual turnover between GH₵20,000 and GH₵750,000, who pay three percent of their turnover in tax.

The third category, the modified cash basis, is for taxpayers with some record-keeping knowledge who want to deduct business expenses when calculating taxable income. The graduated tax rate for this category ranges from five to 35 percent.