The Income Tax (Amendment) Act, 2020, Act 1017 was assented to by the President of the Republic of Ghana on 8 May 2020 and came into force on the same day. In this alert, we highlight the key amendments below:

• A withdrawal from a provident fund or personal pension scheme (before a person reaches the retirement age) by reason of the COVID-19 pandemic due to loss of permanent employment is exempt from income tax.
• A withdrawal by a self-employed person from the personal savings account managed by SSNIT because of the pandemic is also exempt from income tax

Takeaway

• This is a measure to cushion persons who lose their jobs by virtue of the COVID-19 pandemic.
• This applies to a person who has lost his permanent employment in the wake of the pandemic.
• The withdrawal from Tier 3 pension scheme by a person who has lost his employment shall not be subject to income tax.
• Persons in the informal sectors or self-employed persons can withdraw from their pension contribution personal savings accounts in light of the pandemic and there shall be no tax consequence. The reason for the withdrawal must be a result of loss of capital from business in the wake of the pandemic.
• Pension contribution is your future security, thus, withdrawal from your Tier 3 pension fund in view of the above should be done only when it is necessary.