Finance Minister Ken Ofori-Atta has indicated that the Nana Akufo-Addo administration will reduce tax exemptions and also broaden the tax base as part of several measures being considered to protect and enhance the public purse.
Outlining policy initiatives aimed at energizing the private sector during the presentation of the 2017 budget statement in Parliament on Thursday 2 March, Mr Ofori- Atta revealed that government intends abolishing and or reviewing 12 tax elements, including abolishing duties on the importation of spare parts.
"Mr. Speaker, a number of tax measures have been introduced in recent years in an attempt to deal with revenue shortfalls. Some have proven to be nuisance taxes. They have low revenue yielding potential and at the same time impose significant burden on the private sector and on the average Ghanaian. As part of our commitment to reenergize the private sector, Government has decided to review these taxes to provide relief for businesses. The following specific measures shall be implemented in the short to medium term:
* abolish the 1 percent Special Import Levy;
* abolish the 17.5 percent VAT/NHIL on financial services;
* abolish the 17.5 percent VAT/NHIL on selected imported medicines, that are not produced locally;
* initiate steps to remove import duties on raw materials and machinery for production within the context of the ECOWAS Common External Tariff (CET) Protocol;
* abolish the 17.5 percent VAT/NHIL on domestic airline tickets;
* abolish the 5 percent VAT/NHIL on Real Estate sales;
* abolish excise duty on petroleum;
* reduce special petroleum tax rate from 17.5 percent to 15 percent;
* abolish duty on the importation of spare parts;
* abolish levies imposed on kayayei by local authorities;[ES1]
* exempt from taxation, the gains from realization of securities listed on the Ghana Stock Exchange or publicly held securities approved by the Securities and Exchange Commission (SEC);
* reduce National Electrification Scheme Levy from 5 percent to 3 percent;
* reduce Public Lighting Levy from 5 percent to 2 percent;
* replace the 17.5 VAT/NHIL rate with a flat rate of 3 percent for traders; and
* implement tax credits and other incentives for businesses that hire young graduates.
* [ES1]There’s another line for abolishing levies imposed on on religious organisations by local authorities. Check with the main," he added.
He however noted that while the initiatives appear impossible to abolish, especially the duty on importation of spare parts, "we shall abolish it" resulting in a uproar erupting in Parliament.
REVIEW OF IMPORT DUTY AND TAX EXEMPTIONS
Touching on the review of import duty and tax exemptions, the Finance Minister pointed out that "while Government’s focus is on reducing taxes to enhance production, we are also determined to tackle the systemic abuse in the exemptions regime".
"Mr Speaker...There shall be a comprehensive review of the regime on import duty exemptions and tax reliefs with a view to eliminating abuses and improving efficiency in the applications of these incentives. To this end, the review will cover, among others, the following exemptions and tax reliefs as a matter of urgency:
import duties, taxes and levies payable by MDAs and other government departments;
import duties and all forms of taxes and levies payable by both domestic and foreign companies, suppliers and contractors executing projects and contracts in the country;
import duties and all forms of taxes and levies payable by employees, directors and senior officials of both domestic and foreign companies, suppliers and contractors executing projects in the country;
import duties and all forms of taxes and levies payable by both domestic and foreign companies and investors doing business in the country; and
import duties and all forms of taxes and levies payable by non-governmental and charity organisations.
Mr. Speaker, as a transition arrangement, henceforth, applicants for these import duty exemptions and tax reliefs shall be required to, except in exceptional circumstances to be determined by the Minister for Finance, pay fully all applicable import duties and taxes, and apply with justification for refund," he indicated.
Source: Peacefmonline.com/Ghana
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This is a government i feel very confortable to pay my tax to. With God, this government will succeed.
At long last budget of hope has been delivered. Am more than certain Ghana will work again, God bless our homeland Ghana, NPP is indeed here to work
I like the "I CAN DO SPIRIT" exhibiting by this administration.This is the kind of leaders that our motherland needs. It's encourages me and those who think alike. God bless them all...
With God been our Helper, we shall survive this. Am happy this government will now let us breath so relief and fresh air. I also think the budget should be read in twi for the uneducated to understand very well. Especially ....TAXES............Am so happy
Shieeee, we die oooo. Let us pray that these things do not work otherwise we'll stay in opposition for too long. NDC for you.
I can now continue my work. thanks Mr. Minister and my President and Vice
Now the meaning of going to stand in a queue to vote in scotching sun has been finally realized.I can say that my toil for NANA ADDO to come to power has never been in vain for this what i was expecting from him May GOD help him
This is a great day. It can be done. Too much waste and corruption by our politicians. Truly, Asempa budget will embolden all Ghanaians to enhance their creative abilities. No more crooks eating our pie and having 99% of us doing baboon work. Tsooboi, lets move on and leave the clowns and skeptics to their fate. They have stolen and now they will scream Nooooooo!
This is indeed a clash of the Titans, " a pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty" God bless this the new administration and rekindle the can do spirits in all Ghanaians.
it is more than possible Mr. minister, Togo is a duty free port but they've never run to imf like Ghana every now then run to imf inspit of all the huge duties they collect at the port. God bless Ghana, Ghana bless Nana and God bless NPP.