The Ministry of Finance has justified its new proposed taxes, indicating, it will shore up revenue domestically and boost Ghana’s fiscal position following the shocks of Covid-19 and the Russian/Ukraine war.
The Ministry has laid three revenue papers – the Income Tax Amendment Bill, Growth and Sustainable Bill and the Excise Amendment Bill to parliament for consideration to be passed into law.
This was after it got the necessary approval from the Finance Committee of Parliament for it to be considered by the house.
The Finance Ministry is very optimistic that these revenue bills will bring in almost ¢5 billion to support the economy.
Interacting with the media, Director at the Revenue Policy Division, George Winful maintained that it has done the necessary engagements with all the interested parties, who have supported the revenue measures, to secure the approval.
He further that the revenue plan is to aid in bridging the revenue gap due to the inability of the government to collect taxes during the Covid-19 pandemic.
“It is to help to correct the imbalance we are currently experiencing. This is not new but the essence of it is to rake in revenue to address the shortfalls we encountered during the Covid-period and the war between Ukraine and Russia”.
He claimed that the minimum wage earners would still be exempted from taxes under the Income Tax Amendment Bill, which is anticipated to bring in ¢1.2 billion.
If passed into law, the Income Tax Amendment Law would change how foreign exchange losses are reported in financial statements.
Growth and Sustainability Bill
The object of the Bill is to impose a special levy to be known as the Growth and Sustainability Levy to raise revenue for growth and fiscal sustainability of the economy.
The Levy is to be imposed on profit before tax of companies and institutions and on production in the case of mining, upstream oil and gas companies.
The estimated revenue for 2023 is approximately ¢2.26 billion. The Levy is subject to review by the Minister responsible for Finance in 2025.
Income Tax Amendment Bill
The object of the Income Tax (Amendment) Bill, 2022 is to amend the Income Tax Act, 2015 (Act 896) to revise the rates of income tax for individuals and introduce an additional income tax bracket, introduce a withholding tax rate on the realisation of assets and liabilities and on winnings from lottery, unify the loss carried forward provisions and revise the treatment of foreign exchange losses.
It is also intended to increase the optional rate for individuals on the gain from the realisation of an investment asset, revise the upper limits for the quantification of motor vehicle benefits and increase the concessional income tax rates.
Excise Amendment Bill
The object of the Excise Duty (Amendment) Bill, 2022 is to amend the Excise Duty Act, 2014 (Act 878) to revise the excise tax rates for cigarettes and other tobacco products to conform with the Economic Community of West African States (ECOWAS) Protocols and raise revenue to mitigate the harmful effects of these excisable products.
It is also intended to increase the excise duty in respect of wine, malt drinks and spirits; and impose excise duty on sweetened beverages and electronic cigarettes and electronic liquids to increase revenue.