TKay Legal Blog

    So, your business is growing. You’ve passed the GHS 20,000 mark and now the Tax Stamp system no longer applies to you. Don’t panic, the law still has something in place to help you stay legal and  structured. It’s called the Modified Cash Basis. This system is part of Ghana’s Modified Taxation rules, made for small businesses that have moved beyond the informal level, but aren’t yet big enough to handle full accounting requirements.   Here’s how it works: Under Modified Cash Basis, you only report income you’ve actually received, not what you’re owed. If you sold goods in December but got paid in February, you only declare it in February. It’s a cash-first, reality-based method that helps you stay honest without being overwhelmed. You may qualify if: • You are a resident for tax purposes • Your income comes only from Ghana • Your turnover is more than GHS 20,000 but not more than GHS 500,000 • You’re not registered for VAT • You’re not in a partner...

  For many small business owners, tax is a constant worry. The fear of doing it wrong. The stress of not knowing what’s expected. The confusion around forms, figures  and filing. And let’s be honest, most of it feels like it was designed for big companies, not the everyday small businesses owner trying to make an honest living. But here’s the good news, the law has made room for you too. Through the Presumptive Tax system under Ghana’s Modified Taxation rules, there’s now a simple, straightforward way for small businesses to stay legal without losing sleep. It’s called the Tax Stamp and it’s built to meet you right where you are. The Tax Stamp is part of what the Income Tax Act, 2015 (Act 896) calls presumptive taxation. This is a special system for individuals operating small businesses who may not have detailed accounts or formal structures. Instead of asking you to calculate profits, submit audited statements or go through complex tax returns, the law offers a simple pa...

Let’s talk about the business structure most people in Ghana start with: the sole proprietorship.   The way the sole proprietor is   taxed is totally different from how   someone who runs   a limited liability company is taxed. Let’s refresh our memories. Shall we?   What Exactly is a Sole Proprietor? Simple. A sole proprietor is you, running a business in your own name, without creating a separate legal entity. There’s no difference between you and the business. What the business earns is considered your personal income. This means you don’t pay “company tax.” Instead, you pay personal income tax, just like someone working a regular job. But instead of being taxed on a salary, you’re taxed on your business profit. Now, What is Personal Income Tax? Personal Income Tax (PIT) is the tax you pay on any income you personally earn. Whether it comes from employment, rent, investments or your own business. For sole proprietors, it’s your business profits th...

  #TheMSMESeries  When it comes to taxes, most business owners just want to survive without losing everything they’ve worked for. But in trying to save money, many people unknowingly walk a fine line and sometimes, cross it. That’s why today, we’re talking about something crucial for every entrepreneur. The difference between tax avoidance and tax evasion . Two terms that sound similar, but carry very different meanings and consequences. So, what exactly is tax avoidance? Tax avoidance is when you legally reduce your tax burden by arranging your business affairs in a smart, efficient way. You’re not breaking the law, you are using it to your advantage. And yes, that is   allowed. Imagine this: Kofi registers his company in an area with special tax incentives. Adzo delays an income-generating activity until the next tax year for planning purposes. All of these are forms of tax planning and they fall under tax avoidance. It’s completely legitimate. It’s intent...

  Business Forms + Tax Planning   In Ghana, many businesses begin with a good idea, a catchy name and the determination to make it work. But somewhere along the way, an important question is often overlooked: “What kind of business have I actually set up and what does that mean for how I’m taxed?” If you’ve never paused to think about that, you’re not alone. And that’s exactly why we’re having this conversation. But before we even get into taxes (which we will in the next few articles), let’s talk about tax planning. What is Tax Planning, and Why Should You Care? Tax planning is simply organizing your business in a way that helps you legally reduce how much tax you pay. It’s about making smart decisions with what the law already allows, so you don’t end up paying more than you need to. Let’s make it simple: If Akua runs a bakery as a one-woman business, she might be paying tax as an individual. But if she grows and registers as a company or brings in a partner,...

  Every thriving economy has its silent architects. The businesses that may never make headlines but keep entire families afloat, create jobs and build communities. In Ghana, we’ve long called them “small businesses,” but that name has always felt incomplete. Because let’s be honest, what’s “small” about carrying the weight of the economy on your back? Ghana has introduced a new Classification of Micro, Small and Medium Enterprises (MSME) Regulations, 2023 (L.I. 2470) and it’s a game changer. So, how does it work? The regulation breaks businesses down into four categories- Micro , Small , Medium and Large , based on three simple criteria: 1.      How many permanent employees you have 2.      How much money you make in a year (turnover) 3.      The value of your fixed assets So, if you have 1 to 5 employees , and your business brings in an amount less or equal to   GHS 150,000 , you’re officially a Mic...