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Fin. Minister: Duty On Spare Parts Importation Away...Gov't To Abolish/Review 12 Taxes
 
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02-Mar-2017  
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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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