Tax relief is an approved deductible allowance intended to reduce the employee’s taxable income and thereby lessen his or her tax burden. The tax relief is granted against the employee’s assessable income for a particular year of assessment.
A relief is granted on an annual basis.
For relief to be granted, the employee’s personal circumstances are always taken into consideration. For instance, it is considered that a married person with children attending school will normally be more hard-pressed than a person who is single and has no familial responsibilities. Other reliefs are linked to the making of some kind of payment or disbursement (e.g. the payment of a child’s school fees or payment to a charitable organisation).
A resident individual can apply to the Commissioner-General in a prescribed form. The relief is given with respect to your personal situation as stated on your application form.
The relief form can be obtained from any of the GRA’s Domestic Tax Revenue Division offices across the country.
According to data from the GRA, there are types of reliefs and how much is granted.
Marriage/responsibility relief
This type of relief applies to persons who take care of a partner or at least two children. The relief is GH¢1,200 per year.
Child education relief
If you pay fees for your wards in any recognized registered educational institution in Ghana, you qualify for child education relief. The relief is granted to a maximum of three children. A child under this law includes an adopted child or ward.
Both parents (father and mother) cannot claim this relief in respect of the same child /children.
The relief is GH¢600 per child per year.
Disability relief
This is granted to persons who prove to the satisfaction of the Commissioner-General that they are disabled. You must however be receiving income from business or employment. The relief is 25% of the disabled person’s income from business or employment.
Old age relief
This relief is granted to persons who are 60 years of age. The relief is GH¢1,500 per year.
Aged dependant relative relief
This relief is granted to a resident individual who takes care of a relative who is sixty years old and above. The relief is granted up to a maximum of two relatives. Two persons cannot claim this relief in respect of the same relative. The relief is GH¢1,000 per year.
Educational relief
Undergoing training to update your professional, technical or vocational skills or knowledge make an individual qualify to be granted educational relief.
The relief is GH¢2000 per year.
Tax relief is not the same as tax refund. Tax refund is due when your prepaid taxes and tax credits are more than the tax charged for the year. The Ghana Revenue Authority (GRA) owes you.
The GRA can refund the overpayment in cash or give you a tax credit. You can use a tax credit to reduce future taxes.
A relief is granted on an annual basis