26/07/2026
UNDERSTANDING WITHHOLDING TAX IN GHANA
Withholding Tax (WHT) is not an additional tax; it is simply an advance payment of income tax collected at the source. Under Ghana's tax laws, certain individuals and businesses are required to deduct a prescribed percentage from specified payments made to suppliers, contractors, consultants, landlords, and service providers before making the final payment. The amount deducted is then paid to the Ghana Revenue Authority (GRA) on behalf of the recipient.
The purpose of withholding tax is to improve tax compliance, reduce tax evasion, and ensure government revenue is collected throughout the year. Different transactions attract different
withholding tax rates, depending on the type of payment and whether the recipient is a resident or non-resident.
The person making the payment (the withholding agent) is responsible for deducting the correct amount, remitting it to the GRA within the prescribed period, and issuing a withholding tax credit certificate to the recipient. The recipient can then use this certificate to claim the tax already paid when filing their annual tax return, where applicable.
Understanding when withholding tax applies, the correct rate to use, and the filing deadlines is essential for every business. Proper compliance helps avoid penalties, interest charges, and disputes while promoting a transparent and efficient tax system.