The tax waiver is on personal emoluments of all healthcare workers for the months of April, May and June 2020, and on additional allowances for frontline health personnel covering March, April, May and June this year.
President Nana Addo Dankwa Akufo-Addo announced the tax waivers last month and further said frontline health workers would get 50 per cent of their basic salary as an additional allowance, tax-free.
The tax waiver on personal emoluments will cost the nation GH¢237.5 million whilst that on additional allowances will amount to GH¢51 million.
The approval of the waiver follows a request by Finance Minister Ken Ofori-Atta to the Legislature for waiver on income taxes amounting to GH¢288.644 million, to help cushion health workers in both public and private health facilities, who are on the frontline fighting the novel coronavirus pandemic.
The House also approved amendment of the Income Tax Amendment Bill 2020 to waive taxes on withdrawals from the third-tier provident funds and personal pension schemes.
Hitherto, withdrawals from these funds before retirement are subject to 15 percent income tax if withdrawn before 10 years by contributors in the formal sector and before five years for those in the informal sector.
The Government would also exempt withdrawals from tax deduction to provide some relief to employees who have lost their jobs permanently or whose businesses collapsed as a result of the Covid-19 pandemic.
An applicant to the waiver has to satisfactorily demonstrate to the National Pensions Regulatory Authority and Labour Commission that his or her unemployment status was as a result of the pandemic.
Furthermore, donation of stocks of equipment and goods as relief supplies for the fight against the Covid-19 will not attract 15 per cent value added tax (VAT), 2.5 percent National Health Insurance Levy (NHIL) and 2.5 percent GETFund Levy.
This became possible as the House also approved tax waivers on the cost of the donated relief supplies.
Despite the day being a holiday to celebrate the hard work of workers globally, the House went ahead with business and finally adjourned against earlier indefinite suspension on April 4, 2020, from which it was recalled.