Finance Minister Ken Ofori-Atta has said that risking to abolish and review some 14 taxes a year after his government, the New Patriotic Party was sworn into power was part of efforts to create economic space and freedom to send the signal that the government was moving from rampant taxation into an era where entrepreneurship was encouraged.
Describing the move as unthinkable, he stated that it was to assure the business community and essentially the citizenry that government was not going to be coercive.
Mr. Ofori Atta was responding to a question from the BBC’s Sophie Nkenyie on his thoughts on people’s perception of taxes during an Africa Transformation Forum convened by the African Centre for Economic Transformation (ACEP).
“..So for us last year, we did the unthinkable which was to say that we needed to create economic space and economic freedom, and so we actually abolished about 14 taxes which was to give the signal that we’re moving from a system of rampant taxation to encouraging people’s creativity for entrepreneurship and economic freedom and a sense that government is not going to be coercive.” He explained.
Below is the list of the taxes abolished and reviewed by government
Abolished
– 1 percent Special Import Levy;
– 17.5 percent VAT/NHIL on financial services;
– 17.5 percent VAT/NHIL on selected imported medicines, that are not produced locally;
– Initiate steps to remove import duties on raw materials and machinery for production within the context of the ECOWAS Common External Tariff (CET) Protocol;
– 17.5 percent VAT/NHIL on domestic airline tickets;
– 5 percent VAT/NHIL on Real Estate sales;
– Excise duty on petroleum;
– Special petroleum tax rate from 17.5 percent to 15 percent;
– Duty on the importation of spare parts;
– Levies imposed on kayayei by local authorities;
– Taxation, the gains from realisation of securities listed on the Ghana Stock Exchange or publicly held securities approved by the Securities and Exchange Commission (SEC);
Reviewed
– Reduce National Electrification Scheme Levy from 5 percent to 3 percent;
– Reduce Public Lighting Levy from 5 percent to 2 percent;
– Replace the 17.5 VAT/NHIL rate with a flat rate of 3 percent for traders; and
– Implement tax credits and other incentives for businesses that hire young graduates.
