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MSL Business SchoolCharities, NGOs and religious bodies
Ghana Charitable Organisation and NGO Tax
What GRA approval protects, what remains taxable and how an NGO, charity, religious body or public-benefit organisation keeps its tax position compliant.
Published by MSL Business School.
MSL Business School — Charities, NGOs and religious bodies at a glance
Controlling answer
Charitable status is approved, conditional and narrower than a blanket tax exemption.
The Commissioner-General may approve a qualifying entity as a charitable organisation. Income accruing to or derived by the approved organisation is exempt, but the exemption does not apply to its business income. Approval does not remove payroll, withholding, VAT, filing or record-keeping duties that arise from the organisation's actual activities.
Charities, NGOs and religious bodies
Section 97 requires both a permitted purpose and a compliant constitution
| Statutory test | Required position |
|---|---|
| Permitted form | A public charitable institution, public religious institution, body formed to promote social or sporting activities, or registered sporting club. |
| Political activity | The written constitution must prohibit party-political activity, party support and use of the platform for party politics. |
| Functions | The constitution must prevent functions outside the permitted purpose. |
| Private benefit | The constitution must prohibit private benefit except where conferred in pursuit of the permitted function. |
| Public nature | The organisation must demonstrate a real public character, not merely use charitable wording in its name. |
Company, trust, NGO, church, foundation and non-profit registration establishes a legal vehicle. Income-tax approval is a separate GRA decision.
Charities, NGOs and religious bodies
Give GRA evidence of the organisation's public character and controls
- 01Complete legal registration
Register with the relevant public authority and maintain current governing records.
- 02Submit the written constitution
Show permitted objects, political neutrality, private-benefit controls, governance and use of assets.
- 03Explain actual activities
Provide programmes, beneficiary access, funding, budgets, accounts and evidence that operations serve the stated public purpose.
- 04Identify commercial activity
Separate fundraising and programme receipts from any business carried on for profit.
- 05Obtain and preserve the approval
Keep the GRA decision, its effective date, conditions and supporting submission.
The Commissioner-General may revoke approval for good cause or contravention of the statutory requirements.
Charities, NGOs and religious bodies
Map every receipt before applying the exemption
Income accruing to or derived by an approved charitable organisation is exempt under section 97(4).
Section 97(5) removes business income from that exemption. Calculate it under the ordinary business-income rules.
Employees remain subject to PAYE; fees and allowances may trigger withholding according to the recipient and payment type.
The organisation may have withholding-agent duties on covered payments for goods, works and services.
VAT depends on the supply, registration threshold and exemptions under Act 1151—not on the organisation's non-profit label alone.
Customs, exemptions approval, stamp duty and realisation rules require separate testing.
Charities, NGOs and religious bodies
A donor deduction depends on an approved worthwhile cause
Section 100 permits a deduction for a donation or contribution to a worthwhile cause approved by Government. The listed causes include a charitable organisation meeting section 97, an academic, technical or professional scholarship scheme, rural or urban development, sports development or promotion, and another cause approved by the Commissioner-General.
Evidence for the donor: retain the recipient's approval, donation instrument, payment evidence, purpose and acknowledgement. Calling a payment a donation does not by itself establish deductibility.
Charities, NGOs and religious bodies
Maintain the approval after it is granted
- 01Reconcile activities to the constitution
Board minutes, programmes and spending should remain within the approved public purpose.
- 02Separate business income
Use distinct records for commercial operations and allocate shared costs on a supportable basis.
- 03Run payroll and withholding
File and pay PAYE and withholding tax when those obligations arise.
- 04Test VAT and customs transactions
Classify supplies and imports under their own legislation.
- 05File required returns
Approval does not cancel registration or filing duties; disclose exempt and taxable amounts correctly.
- 06Protect against private benefit
Document related-party payments, procurement, remuneration and asset use at arm's length and for the approved purpose.
Frequently asked questions
Ghana Charitable Organisation and NGO Tax questions
Is every registered NGO exempt from income tax in Ghana?
No. Section 97 status requires approval by the Commissioner-General and continuing satisfaction of the statutory conditions.
Is an approved charity's business income exempt?
No. Section 97 expressly removes business income from the charitable-income exemption.
Can a charity engage in party politics?
Its written constitution must prohibit party-political activity, party support and use of its platform for party politics.
Are employees of an NGO exempt from PAYE?
No. Ordinary employment-income and PAYE rules apply.
Is every donation deductible to the donor?
No. The payment must satisfy section 100, including the approved-worthwhile-cause requirement and evidence of the contribution.
MSL Business School legal reference map
Primary authority and official sources
- Income Tax Act, 2015 (Act 896)Open official source →
- GRA Practice Note on Charitable OrganisationsOpen official source →
- GRA tax-registration guidanceOpen official source →
- GRA withholding-tax guidanceOpen official source →
Institutional publisher
TaxLawGH is MSL Business School's Ghana tax education platform.
MSL Business School publishes TaxLawGH to make Ghana's tax law easier to find, understand and apply.
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