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April 26, 2021

Ghana enacts Financial Sector Recovery Levy and introduces other tax reforms

Executive summary

Ghana’s Parliament has enacted the Financial Sector Recovery Levy Act, 2021, Act 1067 (the Levy). This Levy was passed as part of the various tax measures introduced by the Government in the 2021 Budget Statement and Economic Policy (the 2021 Budget) to raise revenue to support the financial sector reforms and for other matters.

This Alert summarizes key aspects of the Act.

Detailed discussion

The Parliament of Ghana has enacted the Financial Sector Recovery Levy Act, 2021, Act 1067 in line with the various measures introduced by the Government in the 2021 Budget to rebuild Ghana’s public finances. The Act was gazetted on 31 March 2021. Since no specific date is stated in the Act as the date of entry into force, the gazette notification date, 31 March 2021, constitutes the date of entry into force of the Act.

The rate of the Levy is 5% and it is applied on the profit before tax of a bank excluding rural banks and community banks. The Levy is not an allowable deduction for the purpose of ascertaining the chargeable income of a person under the Income Tax Act, 2015, Act 896 (as amended).

The Levy is payable quarterly, i.e., by 31 March, 30 June, 30 September and 31 December of each year of assessment. However, for the 2021 year of assessment, the Levy is payable in three instalments on or before 30 June 2021, 30 September 2021 and 31 December 2021. Banks that are subject to the Levy are required to file an estimate of the Levy due for each year together with their annual income tax estimate.

The Ghana Revenue Authority (GRA) is charged with the responsibility for collecting the Levy. The Levy will be administered in accordance with the provisions of the Revenue Administration Act, 2016, Act 915 (as amended). The Finance Minister is empowered to make regulations for the efficient and effective implementation of the Levy and to review the Levy after the 2024 year.

Implementation of the new taxes

Pursuant to the new taxes enacted by the Parliament of Ghana in line with the introduction of Government’s measures to rebuild Ghana’s public finances, the GRA has published a circular on the implementation of the new taxes. The laws and their effective dates are as follows:

  • Penalty and Interest Waiver Act 2021 (Act 1065): 1 April 2021
  • COVID-19 Health Recovery Levy Act, 2021 (Act 1068): 1 May 2021
  • Financial Sector Recovery Levy Act, 2021 (Act 1067): 31 March 2021 (NB. the levy is payable in three instalments commencing from 30 June 2021)
  • Energy Sector Levy (Amendment) Act, 2021 (Act 1064): 1 May 2021
  • Income Tax (Amendment) Act, 2021 (Act 1066): 31 March 2021

For additional information on the new taxes, See EY Global Tax Alert, Ghana enacts various tax amendments introduced in 2021 Budget, dated 13 April 2021.

Establishment of a Tax Court

The Judicial Service of Ghana is preparing to establish a Tax Court to deal with the prosecution of tax cases in the country. This is in response to representations made by the GRA to the Judicial Service for the establishment of the Tax Court. The court will be located at the Criminal Division of the Court of Appeal within the Supreme Court Building. The effective date of commencement is yet to be communicated to the public.


For additional information with respect to this alert, please contact the following:

Ernst & Young Advisory Services Limited, Accra

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


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