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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I appreciate your concerns regarding the reassembling of the supposed spare parts into vehicles and motorbikes. But you need to also recognized that one cannot register such reassembled vehicles at the DVLA because there will not be any documentation from all the stake holders ei the shipping lines, duty stamp from customs, port charges indicating that those "vehicles" were cleared from our ports. For this reason, custom officers are permanently stationed at the DVLA centers whose duties among other things, are to crosscheck all the necessary documents before clearance is given for vehicles to be registered.
As a chartered accountant and a CIMA Member, i will like to state that the abolition of taxes could be good but they would come at a cost to the nation. The removing of tax on importation of spare parts for instance would boost income of the businessmen engaged in the business and could have a positive impact in other areas of the economy for instance there would be more income to save and this could boost credit. However Ghana could become a dumping ground for spare parts and this could have a negative effects on the environments for many years to come. Another issue is that some car importers would buy the cars abroad and then disassemble them into parts, ship to Ghana as spare parts with the view to evading import duty on the vehicles. When the parts come into the country, they could then assemble them back. Some motor and tricycle dealers are already doing this. I think Government should have policies in place to address issues such as above and any other in the implementation of tax abolition schemes.
As a chartered accountant and a CIMA Member, i will like to state that the abolition of taxes could be good but they would come at a cost to the nation. The removing of tax on importation of spare parts for instance would boast income of the businessmen engaged in the business and could have a positive impact in other areas of the economy for instance there would be more income to save and this could boost credit. However Ghana could become a dumping ground for spare parts and this could have a negative effects on the environments for many years to come. Another issue is that some car importers would buy the cars abroad and then disassemble them into parts, ship to Ghana as spare parts with the view to evading import duty on the vehicles. When the parts come into the country, they could then assemble them back. Some motor and tricycle dealers are already doing this. I think Government should have policies in place to address issues such as above and any other in the implementation of tax abolition schemes.
As a chartered accountant and a CIMA Member, i will like to state that the abolition of taxes could be good but they would come at a cost to the nation. The removing of tax on importation of spare parts for instance would boast income of the businessmen engaged in the business and could have a positive impact in other areas of the economy for instance there would be more income to save and this could boast credit. However Ghana could become a dumping ground for spare parts and this could have a negative effects on the environments for many years to come. Another issue is that some car importers would buy the cars abroad and then disassemble them into parts, ship to Ghana as spare parts with the view to evading import duty on the vehicles. When the parts come into the country, they could then assemble them back. Some motor and tricycle dealers are already doing this. I think Government should have policies in place to address issues such as above and any other in the implementation of tax abolition schemes.
Nana Addo has done well by removing some of the wicked taxes IMF imposed on us. the one district one factory system must produce all the fertilizers we need. government should not import one bag of fertilizer into the county because it is the easiest thing we can produce for ourselves and the neighboring countries.
Ghanaians has suffered a lot with poor administration of Ndc and I hope with the help of God all will be okay.
Still the battle is the Lords. NPP PLease dont stop saying this. For he who searches our hearts knows the mind of the spirit, for the spirit of God interceedes for us according to Gods will. If u have a good mind towards the people of ghana, God will bless u.
DO YOU KNOW THAT CHRISTIAN SERVICE UNIVERSITY COLLEGE, KUMASI MOODLE SYSTEM HAS BEEN ENCRYPT TO ACCEPT ONLY INTERNET FROM VODAFONE AND MTN?. THE SYSTEM WHERE ASSIGNMENTS AND EXAMINATIONS ARE PLACED BY THE VARIOUS LECTURERS FOR STUDENTS TO ACCESS ANYWHERE VIA ANY INTERNET IS NOW CASH IN BY THE UNIVERSITY AUTHORITIES BY A SHADY DEAL WITH VODAFONE AND MTN WITHOUT THE KNOWLEDGE OF THE STUDENTS.WE THEREFORE APPEAL TO THE MINISTRY OF EDUCATION TO LOOK INTO THIS MATTER. THIS IS AFFECTING OUR STUDIES SERIOUSLY.
Great! I did not waste my time for voting for change.
A GOOD BUDGET. ITS LEFT WITH IMPLEMENTATION. LET ME ASK OO. HAVE SOMEONE SEEN PEOPLE JUBILATE AFTER A BUDGET STATEMENT BY ANY GOVERNMENT? i SAW IT TODAY. SO FAR SO GOOD. GHANAIANS HAVE MADE THE RIGHT CHOICE