Finance Minister, Ken Ofori-Atta said the government’s tax policy approach since 2017 was aimed to provide substantial relief to the private sector.
However, due to expenditure pressures from 2020, a more aggressive approach became necessary.
Mr. Ofori-Atta highlighted the importance of improving tax ratios in the short term for fiscal sustainability, stating that the country’s 13 percent tax-to-GDP ratio is below peers, with a target of 18-20%.
Addressing the challenge of implementing immediate structural reforms and tax reliefs, the Finance Minister assured Parliament of the government’s commitment to lower taxes for the industry.
He stated that, efforts in collaboration with the Ghana Revenue Authority (GRA) and the Mutual Prosperity Dialogue’s standing committee are underway to achieve this goal.
During the presentation of the government’s 2024 Budget Statement and Economic Policy in Parliament, Mr. Ofori-Atta outlined the prioritised reliefs, underscoring the administration’s dedication to balancing fiscal sustainability with the need for tax reductions in the industrial sector.
Mr. Speaker, further to the above, the following reliefs have been prioritised for
implementation:
i. Extend zero rate of VAT on locally manufactured african prints for two
(2) more years;
ii. Waive import duties on import of electric vehicles for public
transportation for a period of 8 years;
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iii. 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;
iv. Extend zero rate of VAT on locally assembled vehicles for 2 more years;
v. Zero rate VAT on locally produced sanitary pads;
vi. Grant import duty waivers for raw materials for the local manufacture of
sanitary pads;
vii. Grant exemptions on the importation of agricultural machinery
equipment and inputs and medical consumables, raw materials for the
pharmaceutical industry;
viii. 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.