Income Tax Reforms: Here's what Ghanaians need to know

Income tax remains one of the key sources of government revenue, yet many Ghanaians still lack a clear understanding of how the system works, who is required to pay and the reasons behind ongoing reforms.

Speaking at the CEO’s Webinar Hub held on July 31, 2026, tax consultant at Deloitte, Wisdom Kpano, explained the fundamentals of income taxation, describing it as a mandatory charge imposed on earnings generated by individuals, businesses and investors.

He noted that understanding the tax system is important as government continues to introduce reforms aimed at improving revenue mobilisation and strengthening economic management.

Income tax is broadly classified as a direct tax because the individual or organisation earning the income bears the cost of the tax.

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For individuals, he explained that income tax applies to earnings such as salaries and other sources of income.

“For instance, taxes deducted from an employee’s salary are considered direct taxes because the employee bears the cost of the tax directly,” he said.

“When we say direct taxes, these are taxes that you pay on income. When you earn income as an individual, as a natural person, if you work as an employee, the tax you pay on your salary is a direct tax because you are bearing the cost of that tax directly,” he explained.

Businesses also pay income tax through corporate income tax when they generate profits from their operations.

Similarly, individuals who earn returns from investments are required to pay taxes on those earnings.

Ghana’s income tax system is currently regulated by the Income Tax Act, 2015 (Act 896), which provides the legal framework for taxing income earned by individuals, companies and other entities.

Kpano explained that the planned review of the income tax law is aimed at modernising the system to address emerging and complex forms of economic activity.

One key area of focus is cross-border transactions, which can sometimes create opportunities for companies to reduce their taxable income in a country.

The review is expected to introduce stronger measures to protect Ghana’s tax base and ensure that income generated within the country is properly taxed.

Another major component of the reforms, he said, is the enforcement of the Ghana Card number as the sole Taxpayer Identification Number (TIN) for individuals.

The tax consultant explained that linking taxpayers’ transactions to a single identification number would allow government to better understand income flows and improve tax compliance.

“Where the Ghana Card number is the sole number that is used for all transactions and tax identification, you can imagine that your transactions can easily be connected and the government will be able to have much visibility around what you are earning and how those earnings should be taxed,” he stated.

The Ghana Card number is already being used for several financial and official transactions, including mobile money registration, bank account operations and other government-related services.

The reforms mean individuals and businesses will need to pay greater attention to proper income reporting and record keeping.

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For government, improved visibility of economic activities could help reduce tax leakages and expand the tax base.

Kpano said the ultimate goal is to create a more transparent and efficient tax system where individuals and businesses contribute fairly based on their earnings.

DR/MA