Parliament Approves Ghc288.6million Tax Waiver For Healthcare Workers

Ghana’s Parliament on Friday used an emergency session to approve tax waivers to the tune of Ghc288.6million for healthcare workers in the frontlines of the national response to the Covid-19 pandemic.

The waivers are on the emoluments of healthcare workers for April, May and June, and on additional allowances for health workers in the frontline of the battle for March, April, May and June 2020.

The tax waiver on personal emoluments will cost Government Gh¢237.5 million whilst the tax waiver on additional allowances will amount to Gh¢51 million.

These waivers fulfil an announcement that President Akufo-Addo had made in March about the waivers. That announcement had included a provision for front line health workers to get 50% of their basic salary as additional allowance, tax-free.

It is expected that the waivers will motivate health care workers to continue sacrificing in the frontlines of the Covid-19 battle.

A report from Parliament’s Health Committee said the Health Ministry has received the list of private health care workers across the country for coverage under the tax waivers.

Today, the Legislature also approved an amendment to the income tax amendment bill 2020, to waive taxes on withdrawals from the third-tier provident funds and personal pension schemes.  

This is aimed to provide some relief to people who have lost their jobs or businesses due to the Covid-19 pandemic. The relief is in the form of exemption of withdrawals the provident Fund for contributors who are not yet on pension.

Normally, withdrawals before retirement are subject to 15% income tax if withdrawn before 10 years by contributors in the formal sector. For those in the informal sector, the 15% income tax applies for withdrawals done before 5 years.

However, there is a catch; in order to benefit from these waivers, you have to demonstrate that you lost your job due to Covid-19.

Parliament has also approved tax waivers on donations made towards the fight against Covid -19. Equipment, goods and supplies donated to the fight will therefore not attract the 15% VAT, 2.5% National Health Insurance Levy (NHIL) and 2.5% GETFund levy.