Minister of Finance, Ken Ofori Attah
Finance Minister Ken Ofori-Atta has said the Nana Akufo-Addo administration has eased the living condition of Ghanaians regarding taxes.
He said notwithstanding the widely criticised increment of the Communication Service Tax (CST) from 6 per cent to 9 per cent in April, “the overall direction regarding the burden of taxation on Ghanaians have been overwhelmingly downward in the last three years.”
Presenting the 2020 budget statement Wednesday, Mr Ofori Atta said the chain of taxes struck out by the government since 2017 shows that they have “moved the economic policy away from one focused on taxation to one focused on production.”
Which taxes have been scrapped?
According to him,
Import duties were reduced by 50% from April 2019;
The 1% Special import levy was abolished; Excise duty on petroleum was abolished;
17.5% VAT on financial services was abolished;
17.5% VAT on selected important medicines was abolished;
17.5% VAT on Real Estate Sales was abolished;
17.5% VAT on domestic airline tickets was abolished;
Abolished import duty on the importation of spare parts;
Abolished taxation of gains from the realisation of securities listed on the Ghana Stock Exchange and publicly held securities approved by the SEC
Abolished levies imposed on Kayayei; and
Reduced Electricity tariffs
What has the opposition said?
The Former Finance Minister under the erstwhile John Mahama administration disputes government’s claim of a lighter tax burden.
He told Joy News that businesses are rather complaining of too many taxes.
Mr Terkper was in Parliament for the budget presentation
The finance expert says the restructure of the Value Added Tax (VAT) is a clear example of tax increase.
Government in 2018 maintained the VAT at 17 per cent but stripped two components, the GETFund and the NHIL both 2.5 per cent each from it.
The two were made straight levies, which producers and service providers say caused an increase in cost.
Ken Ofori-Atta, in July this year, announced at least 15 new measures to address the continuing energy sector challenges which included increasing the Energy Sector Levy from 17 per cent to 21 per cent.
This, Mr Terkper says is a deviation from government’s stance on reducing tax burdens on Ghanaians.
Also, the much-touted reduction of benchmark value in imports by 50% has not gone down well with all importers.
This, Mr. Terkper noted has caused the traders more difficulties in doing business.
Meanwhile, the telecommunication companies have agreed to stop the controversial upfront deduction of the CST upon airtime top-ups once they reconfigure the systems.