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Introduction
From Sept. 1, 2026, Ghana’s new Income Tax (Amendment) Act 2026 (Act 1178) came into effect after the president signed it into law on Aug. 26, 2026. Implemented by the Ghana Revenue Authority (GRA), the amendment seeks to broaden and update Ghana’s tax system.
The amendments are expected to improve disposable income and support a simpler tax administration framework. The amendment also seeks to provide targeted relief for low-income earners.
This piece is meant to shed more light on the amendment and help Ghanaians understand its implications.
Annual and Monthly Income Tax Rates for individuals
Minimum income earners are exempt from personal income tax. The tax-free threshold for resident income earners has been adjusted from GHc 490 previously to GHc 588 monthly, and GHc 5,880 to GHc 7,056 annually.
After this exemption, a 5%, 10%, 17.50%, 25%, 30%, and 35% rate applies to the next Ghȼ 80, Ghȼ 100, Ghȼ 2,900, Ghȼ 16,000, Ghȼ 30,332, and any amount exceeding Ghȼ 50,000 earned monthly, respectively.
This means if you earn above Ghȼ 588 monthly, the initial Ghȼ 588 is tax free, there is a 5% on the next Ghȼ 80, 10% on the next Ghȼ 100, 17.50% on the next Ghȼ 2,900, 25% on the next Ghȼ 16,000, 30% on the next Ghȼ 30,332 and 35% on the next amount exceeding Ghȼ 50,000, respectively.
Table showing the new rates on chargeable income. Image Source: GRA
What this means for you
This means, for instance, if you earn a lot of money, your whole income is not taxed at 35%. Only the money that exceeds Ghȼ 50,000 (final bucket) gets the 35% rate.
Let’s take an example: you earn Ghȼ 9,000 before tax.
The first Ghȼ 588 out of the 9,000 → no tax/ tax free
The next Ghȼ 80 → 5% tax = Ghȼ 4
The next Ghȼ 100 → 10% = Ghȼ 10
The next Ghȼ 2,900 → 17.5% = Ghȼ 507.50
We have now accounted for tax on Ghȼ 3,668.
We still have Ghȼ 5,332; that is, Ghȼ 9,000 – Ghȼ 3,668 = Ghȼ 5,332
The remaining Ghȼ 5,332 falls into the 25% bracket on the next amount earned.
25% of GH¢ 5,332 = Ghȼ 1,333
So the Pay As You Earn (PAYE) from this Ghȼ 9,000 income will be
Ghȼ 4 + Ghȼ 10 + Ghȼ 507.50 + Ghȼ 1,333 = Ghȼ 1, 854.50.
Any amount earned and remaining after the 25% bracket will be taxed at 30% and 35% in that order.
Turnover Threshold amended
The presumptive tax regime has moved from GHȼ500,000 to GHȼ750,000 for individual taxpayers. This means individuals who operate small businesses and whose turnover lies between GHȼ20,000 and GHȼ750,000 are subject to a presumptive tax of 3% of their annual business turnover. This aims to keep small businesses under a simplified tax system, thereby encouraging tax registration.
Conclusion
The new Income Tax (Amendment) Act 2026 (Act 1178) seeks to provide tax relief for low-income earners and a framework that simplifies compliance for micro and small businesses. It aims to ensure fairness and efficiency in Ghana’s tax system.
