Business News of Saturday, 4 March 2017
Although it is good that some taxes, including the 1% special import levy, have been scrapped, the government should tackle the underlying problems confronting small-scale businesses, Kwame Jantuah, a member of the Public Interest and Accountability Committee (PIAC), has said.
According to him, government will need to tackle the influx of foreigners who engage in petty trading in the country, thereby competing with locals.
During the reading of the budget statement on Thursday, 2 March, Mr Ken Ofori-Atta, Minister of Finance, had mentioned, among other things, the scrapping of excise duty on petroleum products. The government also intends to reduce the special petroleum tax rate on petrol from 17.5% to 15%.
Other taxes that will be completely abolished include the following:
1. The 1% special import levy 2. The 17.5% VAT on financial services 3. The 17.5% VAT on selected imported medicines not produced locally 4. The 17.5% VAT on domestic airline tickets 5. The 5% VAT on real estate sales 6. Duty on importation of spare parts
Also, the 17.5% VAT imposed on traders has been replaced with a 3% flat rate, while businesses that employ young graduates from tertiary institutions will get tax credits and other incentives. Furthermore, there will be tax incentives for young entrepreneurs while the Corporate Income Tax will be progressively reduced from 25% to 20% in 2018.
Additionally, Mr Ofori-Atta said the Akufo-Addo government would initiate steps to remove import duties on raw materials and machinery for production.
Speaking on TV3 on Saturday 4 March, Mr Jantuah said: “Cutting the taxes is good but look at the fundamentals affecting them.
“Go to Abossey Okai and they are crying over the foreigners – Chinese, Indians, and Lebanese – who have the money competing with them.”