A large section of Ghanaians have expressed so much satisfaction over NPP’s abolished taxes, especially on some aspects of trade and commerce.
The New Patriotic Party (NPP) government has finally fulfilled its promise of slashing some of the numerous taxes imposed by the previous National Democratic Congress (NDC) government.
During his presentation of the 2017 national budget statement and economic policy in Parliament, Ghana’s Finance Minister, Ken Ofori-Atta announced the extermination of eight taxes and reduction of four others, many of which were set by the previous government. This abolition also included the cancellation of levies imposed on head porters popularly known as ‘kayayei’.
While making the announcement, Ofori-Atta pointed out that the unnecessary imposition of taxes by the previous government, were major factors that hindered growth and development of industries in Ghana; hence, the NPP’s decision to abolish some.
Below is the list of taxes that have been abolished and reviewed by the government.
- 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 realization of securities listed on the Ghana Stock Exchange or publicly held securities approved by the Securities and Exchange Commission (SEC);
- 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.
Abossey-Okai Spare Parts Dealers Rejoice Over Tax Cut
A large section of Ghanaians have expressed so much satisfaction over NPP’s abolished taxes, especially on some aspects of trade and commerce. The abolition of import levies on spare parts has seen a great sense of relief engulf Abossey Okai, one of Ghana’s major destinations for auto mechanic services and auto parts sales.
Spare parts dealers at Abossey-Okai in Accra, who have been relieved by the welcome development, have lauded government for taking such decision. Huge taxation has since been so detrimental to the growth of their businesses, with the burden making it very difficult for them to explore and expand.
Though the claim was denied, there had been reports that dealers in Abbosey-Oka area out of excitement, announced a discount on their products in solidarity with the new government.
NDC Stakeholders Against NPP’s Abolished Taxes
Some government stakeholders are however, not subscribing to the recent move by the NPP government to abolish some taxes. Finance Minister under erstwhile NDC government, Seth Tekper has bemoaned the massive tax cuts outlined in he 2017 budget. The reduction which Terkper implied to be reckless, will deprive Ghana of revenues needed for the development of the country’s economy, according to him.
Mr. Tekper made known his reservations while speaking with Accra-based Joy FM. Laying more emphasis on tax free spare parts importation; the former finance minister warned the new government of looming consequences of the move, which would include the encouragement of smuggling, as well as depriving the government of needed taxes for development.