Ken Ofori-Atta
Government yesterday announced in Parliament that it has abolished some 11 taxes it termed ‘nuisance’ taxes and reviewed four other taxes, which were negatively affecting businesses in the country.
Kenneth Ofori-Atta, Minister of Finance, who was delivering the 2017 Budget Statement and Economic policy, said the move was aimed at lessening the burden on consumers and businesses and boost the private sector, which is the engine of growth.
The taxes mostly affect businesses operating in the aviation, finance, real estate industries.
The 11 key taxes abolished included the one percent Special Import Levy, 17.5 percent VAT/NHIL on financial services, 17.5 percent VAT/NHIL on selected imported medicines that were not produced locally, import duties on raw materials and machinery for production within the context of the ECOWAS Common External Tariff (CET) Protocol and 17.5 percent VAT/NHIL on domestic airline tickets.
The rest were the 5 percent VAT/NHIL on Real Estate sales, Excise duty on petroleum, Special Petroleum tax rate from 17.5 percent to 15 percent, duties on the importation of spare parts, levies imposed on ‘Kayayei’ by local authorities and additionally taxation on the gains from the realisation of securities listed on the Ghana Stock Exchange or publicly held securities approved by the Securities and Exchange Commission (SEC).
Reviews
Government said it would reduce the 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.
Import duty and exemptions
Mr. Ofori-Atta said while government was focus on reducing taxes to enhance production, it was also determined to tackle the systemic abuse in the exemptions regime.
“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 application 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 form of taxes and levies payable by both domestic and foreign companies, suppliers and contractors executing projects and contracts in the country and import duties and all forms of taxes and levies payable by non-governmental and charity organizations,” he said.
The Finance Minister said henceforth applicants for these import duty exemptions and tax reliefs shall be required to, except in exceptional circumstances to be determined by the Minister of Finance, pay fully all applicable import duties and taxes and apply with justification for refund.
By Cephas Larbi
cephrok@yahoo.com