Section 8 of the Sixth Schedule of the new tax act, Income Tax Act, 2015 (Act 896), provides tax rebates to companies who employ fresh graduates.
The deduction is as follows
1% of workforce is fresh graduates – 10% of their salaries and wages is deductible
More than 1% but less than 5% of workforce is fresh graduates – 30% of their salaries and wages is deductible
Above 5% of workforce is fresh graduates – 50% of their salaries and wages is deductible
And “fresh graduate” per the Act refers to anyone who has graduated from a tertiary institution for the first time. Their age or previous experience is irrelevant.
This is a decent policy to encourage the employment of fresh graduates. GRA has to do more in terms of communicating this policy.
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