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June 10, 2020
Ghana Revenue Authority issues Practice Note on excise duty sliding scale policy
The Commissioner-General (CG) of the Ghana Revenue Authority (GRA), the officer responsible for the day-to-day administration of the GRA affairs and answerable to the Board for the performance of the functions of that office, has issued a practice note on the interpretation of certain provisions in the Excise Duty (Amendment) (No. 2) Act, 2015, Act 903, pursuant to sections 100 and 101 of the Revenue Administration Act, 2016, Act 915 (RAA).
This Alert highlights the key interpretations set forth in the practice note.
This Practice Note (Number DT-EX/2020/001) provides direction and guidance on the interpretation and application of Tariff numbers 2 and 3 of the First Schedule to Act 878 as amended by Act 903. The objective of the sliding scale excise duty is to encourage the use of local raw materials in the manufacture of malt drink, beer or stout by imposing lower rates of excise duty for greater use of local raw material. This practice note was issued on 30 April 2020.
The key points in the practice note are:
Application of the law
Act 878 provides for excise duty on a sliding scale based on a percentage use of local raw materials1 for brewery companies in the manufacture of malt drink, beer or stout.
The basis for the determination of the percentage use of local raw materials shall be the weight of the local raw materials as a percentage use of the total weight of the constituents used in a brew, excluding water.
The following must be considered in computing the percentage use of local raw materials and accounting for excise duty on the manufactured excisable products:
Criteria for the determination of applicable tax rate on the sliding scale
1. Local raw material means raw materials grown or derivatives of raw materials grown in Ghana.
For additional information with respect to this Alert, please contact the following:
Ernst & Young Advisory Services Limited, Accra
Ernst & Young Advisory Services (Pty) Ltd., Africa ITTS Leader, Johannesburg
Ernst & Young Société d’Avocats, Pan African Tax – Transfer Pricing Desk, Paris
Ernst & Young LLP (United Kingdom), Pan African Tax Desk, London
Ernst & Young LLP (United States), Pan African Tax Desk, New York