Business News of Tuesday, 14 March 2017
Finance Minister, Ken Ofori-Atta, has submitted to Parliament Tuesday amendment bills of some laws to allow for government’s tax cuts.
The bills include the Income Tax (Amendment), Special Petroleum Tax (Amendment), Special Import Levy (Amendment), and a repeal of the Custom and Excise (Petroleum Taxes and Petroleum Related Levies).
The government on March 2 announced its decision to scrap, duties on imported spare parts, 50ps levy on head porters (Kayayei) by local authorities and seven (7) other taxes.
The Finance Minister who made this known during his presentation of government’s first budget listed the;
(a) Abolishment of the one percent special import levy,
(b) Abolishment of the 17.5 VAT on financial sevices
(c) Abolishment of the 17.5% VAT on selected imported medicines
(d) Initiate steps to remove import duties on raw materials and machinery
(e) Abolishment of the 17.5 VAT on domestic airline tickets
(f) Abolishment of the 5% VAT on real estates
(g) Abolishment of the excise duty on petroleum
(h) Reduce special petroluem tax rate from 17.5% to 15%
(i) Abolishment of duties on importation of spare parts.
(j) Abolishment of levies imposed on Kayayei’s by local authorities
(k) Replace the 17.5 VAT on Ghana Stock Exchange (GSE) traders to a flat rate of 3.5 percent
(l) Reduce National Electrification levy
The only way for some of the cuts to take effect would be for government to make amendments to some key laws, hence the submission of the amendment bills to the House by the Minister.
Political opponents especially the opposition National Democratic Congress (NDC) have been displeased by government’s tax cuts, citing challenges that might pose for nation’s economy.
Deputy Minority leader, James Klutse Avedzi has said the scrapping of duties on spare parts would empower importers to flood the country’s market with inferior products. This, he believes would come with negative health consequences.
Deputy Minority leader, James Avedzi Klutsey
But government has maintained the decision will give respite to Ghanaian businesses many of which it said reeled under financial difficulties during the erstwhile NDC government.
“Some of these taxes have proven to be nuisance taxes,” Mr Ofori-Atta said, adding the measures to eliminate and reduce some of them is in line with government’s commitment to ensure that the economy regains its strength.