Has your company employed fresh graduates in the current year of assessment? You may qualify for additional tax deductions when determining corporate income tax for the basis period.
Section 8 of the Sixth Schedule of the Income Tax Act 2015 (Act 896) as amended states that in calculating the income of a company from conducting a business for a year of assessment, the company is entitled to an additional deduction for salary and wages paid during the year to a fresh graduate from a recognised Ghanaian tertiary institution.
The deduction scale
- Fresh graduates up to 1 percent of the workforce — additional deduction of 10 percent of wages and salaries.
- Above 1 percent but not more than 5 percent — additional deduction of 30 percent of wages and salaries.
- Above 5 percent — additional deduction of 50 percent of wages and salaries.
The Act defines a fresh graduate as a person who has graduated from a tertiary institution for the first time, whether or not that person was previously employed. Companies can therefore optimise their tax liability through this incentive.