Amended Income Tax law increases taxable cap on motor vehicle benefits for employees

Parliament has recently passed the Income Tax (Amendment) Act, 2023 (Act 1094), which introduces several changes to the country’s income tax regime. Among the most significant changes is the increase in the taxable cap for employees who receive motor vehicle benefits. The changes have been made to enhance compliance with the tax laws, prevent tax evasion, and improve the tax system’s efficiency.

The new law increases the taxable cap for drivers and vehicles with fuel from GHS 600 to GHS 1,500, while the cap for vehicles with fuel has been increased from GHS 500 to GHS 1,250. The cap for benefits of vehicles or fuel only has also been raised from GHS 250 to GHS 625. In all cases, the tax rates remain the same at 12.5%, 10%, and 5%, respectively.

Act 1094 also revises the rates of income tax for individuals, introducing an additional income tax bracket and a minimum chargeable income. The new law is expected to generate additional revenue for the government while easing the tax burden on low and middle-income earners. The government is committed to building a sustainable revenue base through an efficient tax system that will support economic growth and development in the country.

In addition to increasing the taxable cap for motor vehicle benefits, Act 1094 imposes a withholding tax on the realisation of assets and liabilities and lottery winnings. The law also revises the treatment of foreign exchange losses and revises the upper limits for the quantification of motor vehicle benefits.

The passage of Act 1094 is part of the government’s broader effort to improve the tax system’s efficiency and increase revenue generation. The government has reiterated its commitment to building a fair and efficient tax regime, which will benefit both the state and taxpayers. The new law aims to promote tax compliance while preventing tax evasion and improving the efficiency of the tax system.

The Income Tax Act, 2015 (Act 896), is one of the three recently amended and passed laws by the Parliament, demonstrating the government’s commitment to improving the country’s tax regime. These changes are expected to create a more equitable tax system, which will help to foster economic growth and development.

The government recognizes the importance of a robust tax system in achieving sustainable economic growth and development. The new law is a step in the right direction towards building a sustainable revenue base that will support the government’s development agenda. With these changes, the government hopes to increase revenue collection while promoting a more equitable tax system.

The Income Tax (Amendment) Act, 2023 (Act 1094) marks a significant milestone in Ghana’s tax system. The government’s commitment to building a fair and efficient tax regime will benefit both the state and taxpayers, and is essential to the country’s economic growth and development. The changes made through the passage of Act 1094 aim to improve tax compliance and efficiency, while generating additional revenue for the government. These changes are a positive development for Ghana’s economy and tax systemdevelopment for Ghana’s economy and tax system.

Source: norvanreports