There are numerous accountancy, audit and tax firms in Ghana and high levels of demand for accounting professionals in the West African country. Despite this high demand the accountancy and auditing sector is still fiercely competitive. The ‘Big Four’ accountancy firms dominate the market, auditing 72% of the 25 members on Ghana’s stock exchange (2004). The main legal framework for corporate accounting and auditing practices is the Ghana Companies Code, 1963 (Act 179). Companies are required to undergo auditing on a regular basis in accordance with Section 134(5) of the Ghana Companies Code, 1963 (Act 179). With regard to the adoption international accounting standards Ghana’s listed companies have published their financial statements in accordance with IFRS from years starting 1 January 2007.
Higher education and practical experience are necessary to qualify as an accountant or auditor. Ghana recognises the accountancy qualifications of the 11 members of the Association of Accountancy Bodies in West Africa (ABWA) as valid. The Institute of Chartered Accountants is the sole body charged with the regulation of the accountancy profession in Ghana. It is a self-regulating organisation and a member of the International Federation of Accountants and ABWA.
The capital gains tax rate is currently 15% and the corporation tax rate is 25%. The VAT rate is 15% with a flat rate of 3% for retailers. The Ghana Revenue Authority administrates taxes and customs duties in the country. Ghana is ranked 90th in the world for paying taxes behind other African countries such as, Sierra Leone (76th), Zambia (47th), and Rwanda (19th), according to the World Bank’s Ease of Doing Business Index (2011). Financial statements must be prepared annually and filed by four months after the end of their accounting year; the government’s fiscal year is the calendar year, however companies are able to choose their own accounting year. The Ghanaian government wishes to raise the corporate tax rate of mining activities from the standard 25% to 35%, it also has plans for a windfall tax of 10%. But for the hotel and hospitality industry, there are plans for the corporate rate of tax to be reduced from 22% to 20%. Incentives for investment proposed by the government include both, tax holidays for the Ghana Stock Exchange and the exemption from capital gains tax for listed companies being extended for five more years. The aim of these measures is to generate investment on Ghana’s stock exchange.
