EXPLAINER: Nuisance tax and the 11 types in Ghana
A nuisance tax is collected in small amounts on a wide range of commodities
A nuisance tax according to Merriam Webster is an excise tax collected in small amounts on a wide range of commodities directly from the consumer.
Read full articleIn other words, it is a small excise tax levied on separate purchases and collected directly from the purchaser.
Any excise tax imposed in very small amounts that is almost unnoticeable, especially when considered together with other such small taxes may come off as “annoying” to the consumer but help in the taxing authority’s revenue mobilization.
It is often imposed as a percentage of the selling price of goods or services, payable by the customer and transmitted by the seller to the taxing authority.
In 2017, the government abolished some 11 key taxes as they are considered as “nuisance” taxes.
These included the one percent Special Import Levy, 17.5 percent VAT/NHIL on financial services, 17.5 percent VAT/NHIL on selected imported medicines that were not produced locally, import duties on raw materials and machinery for production within the context of the ECOWAS Common External Tariff (CET) Protocol and 17.5 percent VAT/NHIL on domestic airline tickets.
The rest are, 5 percent VAT/NHIL on Real Estate Sales, Excise duty on petroleum, Special Petroleum tax rate from 17.5 percent to 15 percent, duties on the importation of spare parts, levies imposed on ‘Kayayei’ by local authorities and additionally taxation on the gains from the realisation of securities listed on the Ghana Stock Exchange or publicly held securities approved by the Securities and Exchange Commission (SEC).
The term has generally been used to describe any tax that consumers do not feel comfortable paying.
