GIFT TAX PROVISIONS
Gift tax provisions are the various rules or regulations laid down by the Ghana Revenue Authority on how Gift tax in Ghana can be collected.
Act 592 (Internal revenue Act, 2000) has provisions for various types of gifts that are taxable under different circumstances.
Act 592 has two provisions for taxable gifts. The first is gifts received from one’s employment and the second is gifts received under the Gifts Tax provision under chapter III of the same Act. The differences are as follows:
- Gifts received from employment, although not distinctly stated; form part of gains and profits arising from the employment and are generally donated by the employer, any of his associates or in the course of the exercise of the employment. Gifts under the gifts tax provisions may arise from any source.
- The tax payable on gifts arising from employment sources is computed using graduated rates of tax while gifts assessable under the gift tax provisions are taxed at a flat rate of 10%.
iii. Gifts from employment sources are taxed together with other incomes arising from the employment as well as individual’s income from any trade, profession or vocation for a year of assessment. Gifts arising under the gifts tax provisions are not included in incomes from other sources. They are taxed separately.
- In the case of gifts from employment, the whole amount is taxed. However, in the case of gifts under the gifts provisions, there is a tax free element of GH¢50.
- The value of the gift from employment sources is determined as either cost to the donor or how much would have been realized when sold. On the other hand, the value of a gift under the gift tax provisions is the market price at the time and date of receipt.
- Gifts arising from employment sources may take any form – cash or in kind. Gifts taxable under the gift tax provisions are specific.