Importers in Ghana have welcomed the decision by the Akufo-Addo-led government to scrap the 1% special import levy as a way of growing businesses in Ghana.
During the reading of the budget statement, Mr Ken Ofori-Atta, Minister of Finance, 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 to journalists a few hours after the budget presentation, Sampson Awingobit, who is the Executive Secretary of the Importers and Exporters Association of Ghana, said: “Although we have a lot of challenges at the ports and customs, the scrapping of the import levy has taken away a chunk of our burden and we are extremely happy. We commend the government for honouring its campaign promise they made to us during the campaign season in 2016.”
He added: “I was in parliament when the minister was reading the statement and I took note of every single item he mentioned, and, so, I can confidently describe this budget as ‘Ahotɔ’ (Relief) budget. This will go a long way to grow businesses in Ghana and in the end these businesses expanding to employ more people. As we speak now there is a massive celebration at Abossey Okai (Accra’s spare parts hub) upon the announcement by the Finance Minister. We thank the President so much. Ghanaians will start feeling the impact of this decision soon after parliament has approved the budget.”