The Government will implement eight new reliefs to cushion the private sector and ultimately improve the nation’s Gross Domestic Product (GDP) says the Minister of Finance, Mr Ken Ofori Atta.
He said that in the short-term, fiscal sustainability requires that the government improve the tax ratios significantly otherwise, the long-term competitiveness will be eroded hence the introduction of the reliefs.
“As we all know, our country’s 13 percent tax-to-GDP ratio is far below our peers. Our target is 18-20% and we are on course,” he said.
Mr. Ofori-Atta made this known when he presented the 2024 budget estimates and economic policy of the government to Parliament in Accra today.
This was contained in the 2024 budget dubbed “Nkunim” which is aimed at advancing the country on the path toward fiscal consolidation, macro stability, and growth.
The reliefs included “extend zero rate of VAT on locally manufactured African prints for two (2) more years; waive import duties on import of electric vehicles for public transportation for a period of 8 years; Waive import duties on semi-knocked down and completely knocked down Electric vehicles imported by registered EV assembly companies in Ghana for a period of 8 years.”
It also includes “extend zero rate of VAT on locally assembled vehicles for 2 more years; Zero rate VAT on locally produced sanitary pads; grant import duty waivers for raw materials for the local manufacture of sanitary pads.”
“Grant exemptions on the importation of agricultural machinery, equipment and inputs and medical consumables, raw materials for the pharmaceutical industry; and a VAT flat rate of 5 percent to replace the 15 percent standard VAT rate on all commercial properties will be introduced to simplify administration,” he added.
He added that as part of the government’s effort to address the negative externalities of plastic waste and pollution, it will review and expand the Environmental Excise Duty to cover plastic packaging, and industrial and vehicle emissions.
He further stressed the need for the review of the Stamp Duty Act, 2005 (Act 689) to realign the rate with current economic realities saying that “the bands subject to ad valorem taxes will be expanded while the specific rates will be reviewed upwards.”
