Citi Business News has gathered three key taxes will be abolished this year as part of government’s promise to scrap a number of taxes.
During its campaign the President elect Nana Akuffo- Addo as well as his running mate Dr Bawumia asserted that they will embark on a number of tax reforms when elected into power.
Finance Minister Ken Ofori Atta earlier told Citi Business News as many taxes which have been termed ‘nuisance taxes’ will be abolished this year and will be inculcated in government’s budget which is due to be read next month.
But Citi Business News has learnt the special import levy and 5% VAT on Real Estate sales will be totally scraped this year – 2017.
While the VAT for micro and small enterprises will be reviewed from the current 17.5% to the 3% Flat Rate VAT thsi year.
Confirming the development at the Graphic Business Forum Senior Minister Yaw Osafo-Maafo stated that the three taxes will be scraped this year.
Special Import Levy
Government in 2013 introduced the special import levy to increase its revenue generation to support shortfalls in the 2013 fiscal year budget.
The levy which was to be in force for three years has been running for close to five years was slapped on a number of imported goods including outboard motors, agricultural machinery, dairy milking products, energy saving bulbs, book binding machines, cutlasses and some farming inputs including fertilizers.
5% VAT on Real Estate sales
In 2015, the five percent VAT on Real Estate sales was introduced.
The tax was initially 17.5 percent but was beat down to 5 percent after deliberations with industry players in the real estate industry and the then Vice President of Ghana Paa Kwesi Amissah-Arthur.
GREDA following the introduction petitioned government to find a more effective way of taxing the industry to ensure government and the private sector contribute in closing the housing deficit. Although at the time GREDA proposed a 4 % VAT during discussions with government, the Vice President Paa Kwesi Amissah-Arthur maintained that government was right to tax the real estate sector.
Other taxes to be scraped under new govt
Meanwhile other taxes are expected to be scrapped with the next four years.
They include the 17.5% VAT on financial services , 17.5% VAT on domestic airline tickets, Import duties on raw materials and machinery for production within the context of the ECOWAS Common External Tariff (CET) Protocol and a reduction in corporate tax from 25 to 20 percent.
A number of tax reforms are also expected to be introduced including tax credits and other incentives for businesses that hire young graduates from tertiary institutions, a review of withholding taxes imposed on various sectors (including the mining sector), provision of tax and related incentives for manufacturing businesses in sectors such as agro-processing, light industries, pharmaceuticals, petrochemicals, garments and textiles, among others.
By: Vivian Kai Lokko/citibusinessnews.com/Ghana