The flagbearer of the National Democratic Congress (NDC), John Dramani Mahama has promised to exclude small businesses from paying both corporate and personal income tax.
This is to enable entrepreneurs to pump back the profits they make into their businesses for them to grow, he explained during the manifesto launch of the NDC ahead of the 2020 elections.
He vowed, “We will make the business environment friendly again…we will exempt small businesses from paying corporate and personal income tax. That is to inject their profit back into their businesses. We estimate that this will involve about 1.4 billion Ghana cedis a year and that will be the best stimulus you can inject back in order to expand small and medium enterprises”.
For Medium enterprises, the next NDC government will allow organisations to pay only 15 percent of the corporate income tax instead of the current 25 percent to empower them to reinvest and grow their businesses.
Bringing to bear other tax relief programmes for businesses, Mahama indicated that “We will exempt newly established medium-sized companies that employ up to 20 people from paying corporate income tax for the first year when they are establishing the business”.
Mahama explained that this is important because the “most critical time in establishing a business is the first year when you are investing and when you are investing, it is not the right time government has to come asking you to bring money and so we will give them that relief”.
For businesses that have over 20 employees, they would be exempted from tax payment for 2 years.
“And for businesses that employ 20 or more…they’ll get corporate tax exemption for 2 years so that they can establish the business properly and then expand the business to employ more people”.
All these tax reliefs, Mahama stated, are to put an end to job loses.