Mr Ken Ofori- Atta, Minister of Finance and Economic Planning, has proposed a 2.5 per cent increase in the Value Added Tax (VAT) to support roads and digitisation agenda of government.
He said the Government would “Review the E-levy Act and specifically reduce the headline rate from 1.5 per cent to 1 per cent of the transaction value as well as the removal of the daily threshold.”
Mr Ken Ofori-Atta announced this as part of the 2023 Budget Statement and Economic Policy he presented to Parliament on Thursday, November, 24.
VAT is applied on the value added to goods and services at each stage in the production and distribution chain.
It forms part of the final price the consumer pays for goods or services.
The 2018 Mid-Year budget amended the VAT rate from 15% to 12.5% and delinked the National Health Insurance Levy (NHIL) and Ghana Education Trust Fund Levy (GETFund Levy) from VAT.
The Electronic Transfer Levy Act, 2022 (Act 1075), on the other hand, imposes a levy of 1.5% on electronic transfers.
The Levy is charged to the transferor at the time of transfer.
It is charged by specific entities listed in the First Schedule to the Act.
They areThe charging entities are:
Electronic Money Issuers (EMIs);
Payment Service Providers (PSPs);
Banks: Specialised Deposit-Taking Institutions; and other Financial Institutions prescribed by Regulations made under the Act.
The Minister said that as part of an aggressive domestic revenue Mobilisation, the Government would fast-track the implementation of the Unified Property Rate Platform Programme in 2023.
The Government had also proposed several measures to boost local production capacity, including supporting large-scale agriculture and agribusiness interventions through Development Bank Ghana and Agriculture Development Bank.
The Minister said public sector institutions that relied on imports either for inputs or consumption would be splashed by 50 per cent, working with Ghana Audit Service and the Internal Audit Agency to ensure compliance.
In export promotion, Mr Ofori-Atta said the country’s productive capacity would be expanded in agriculture to encourage the consumption of locally produced rice, vegetable oil, poultry and fruit juice, amongst others.