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Investment & Legal Framework
to four assets are depreciated on a reducing balance
basis. However, class three assets enjoy an addi-
tional 5% capital allowance in year 1 but this does
not affect the tax written down value. Classes five
and six are depreciated on straight line basis. The
applicable capital allowance rates are as shown in
the second chart of the previous page.
Taxpayers are obliged to notify the Commissioner of
Internal Revenue of any new assets acquired within
one month after the assets have been used in the
business. Unlisted capital allowances can be carried
forward indefinitely but cannot be transferred either
separately or together with a depreciable asset i.e.
upon the sale or transfer of the asset.
Carry forward losses
Losses from farming, mining, manufacturing mainly
for export, agro – processing, tourism and ICT (Soft-
ware Development) can be carried over and deduct-
ed for five years.
Investment guarantees
• Free Transferability of Capital, Profits and Divi-
dends: an enterprise registered with the GIPC is
guaranteed unconditional transferability in freely
convertible currency of dividends or net profits attrib-
utable to the investment. This must be done through
any authorized dealer bank.
• Insurance Against Non-Commercial Risks: Ghana
is a signatory to the World Bank’s Multilateral In-
vestment Guarantee Agency (MIGA) Convention.
This Convention guarantees coverage (insurance)
against non-commercial risks such as transfer re-
strictions, breach of contract, expropriation, war and
civil disobedience.
International Agreements
Double Taxation Agreements
Ghana has signed double taxation agreements
(DTAs) with some countries to facilitate cross- bor-
der trade and investment and create an enabling
environment for foreign direct investment in flows to
Ghana and the respective countries. Currently, it has
such agreements with France, The United Kingdom
(UK), Belgium, Italy, Germany, Yugoslavia, and the
Netherlands.
Investment Promotion
and Protection Agreements
Ghana has signed Bilateral Investment Protection
Treaties with twentyone countries. Currently, coun-
ties with whom the agreements have been signed
and ratified are UK, China, The Netherlands, Den-
mark, Germany, The Swiss Confederation and Ma-
laysia. The countries with whom agreements have
been signed but awaiting ratification are La Cote
d’Ivoire, Egypt, The United States of America (US),
France, Zambia, Cuba, Yugoslavia, Mauritania,
Guinea, South Africa, Benin, India and Burkina Faso.
Countries with agreements pending are South Ko-
rea, Canada, Pakistan, Ethiopia, Israel, Turkey,
Jamaica, Nigeria, Belgium, Indonesia, Philippines,
Mauritania, The Czech Republic, Australia, Singa-
pore, Morocco, Togo, Finland and Spain.
African Growth Opportunities Act (AGOA)
Ghana has signed up to AGOA as a means to pro-
mote trade and investment between her and the
US. The Government of Ghana initiated measures
to encourage farmers and local exporters to take
advantage of the opportunities offered by AGOA.
One of such initiatives was the President’s Special
Initiative (PSI) for cassava industrial starch, textiles,
garment and apparel production for export. Small-
scale businesses were resourced and trained to link
up with the PSI companies to produce directly for
the US. Ghana’s main export to the US consists of
forest products, agricultural products, energy-related
products, minerals and metals, textiles and apparels,
chemicals and related products, footwear, machin-
ery, transportation equipment, and manufactured
goods and electrical products. Exports are gradually
increasing after it had declined in 2008 mainly due to
the global economic recession.
Domestic Tax System
The tax forms within Ghana’s tax system that relate
to investors in the country are Income tax, Withhold-
ing tax, Capital Gains tax and Value Added tax.
Income Tax
Income tax incentives are provided under the Inter-
nal Revenue Act, 2000 (Act 592) and further amend-
ed by Internal Revenue (Amendment) (No.2) ACT,
2006 (ACT 710). Depending on whether a company
is listed on the Ghana Stock Exchange, the sector
and the location in which it operates, it is liable to pay
certain levels of tax.
Taxable profits are based on profits declared in au-
dited accounts subject to adjustments made for capi-
tal allowances. For details refer to income tax incen-
tives discussed above under the GIPC Act.