Finance Minister, Ken Ofori-Atta has announced that the government has initiated reforms to alleviate the tax burden on Ghanaians.
According to him, the government’s tax policy since 2017 initially focused on providing substantial relief to the private sector until expenditure pressures in 2020 necessitated a more aggressive approach.
During his presentation of the government’s 2024 Budget Statement and Economic Policy in Parliament on Wednesday, Mr Ofori-Atta emphasised the importance of enhancing tax ratios in the short term for fiscal sustainability.
He underscored that failing to achieve this goal would jeopardize long-term competitiveness.
“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.
The Finance Minister acknowledged the challenges of implementing all necessary structural reforms and tax reliefs immediately but assured Parliament of the government’s commitment to reducing taxes for industry.
[embedded content]He highlighted specific reliefs prioritised by the government, including the extension of the zero rates of VAT on locally manufactured African prints and locally assembled vehicles, as well as waivers on import duties for electric vehicles and agricultural machinery.
To address environmental concerns, Mr. Ofori-Atta announced the government’s plan to expand the Environmental Excise Duty to cover plastic packaging, industrial emissions, and vehicle emissions.
“Mr. Speaker, the Stamp Duty Act, 2005 (Act 689) has not been reviewed since its enactment in 2005. To realign the rate with current economic realities, Government, in 2024, will review the rates and fees for stamp duties. The bands subject to ad valorem taxes will be expanded while the specific rates will be reviewed upwards,” he said.
The Finance Minister outlined measures to simplify taxation, such as the introduction of a VAT flat rate of 5 per cent on commercial properties and a simplified tax return to promote voluntary compliance, especially for individuals in the informal sector.
In response to challenges faced by medical personnel, Mr. Ofori-Atta stated that the government would engage with the Ghana Medical Association to provide import duty waivers on vehicles, aiming to ease transportation burdens for doctors and enhance healthcare delivery.
Closing his presentation, Mr Ofori-Atta reassured Ghanaians of government’s commitment to improving their quality of life.
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