Gov't scraps taxes on African prints, locally-produced sanitary pads, locally-assembled cars

Finance Minister Ken Ofori-Atta has announced some tax reliefs on sanitary pads and other locally manufactured products.
"Mr. Speaker, our approach to tax policy since 2017 was to give significant relief to the private sector until expenditure pressures from 2020 required a more aggressive approach. It is important to note that in the short-term, fiscal sustainability requires that we improve our tax ratios significantly otherwise, our long-term competitiveness will be eroded", he told parliament on Wednesday, 15 November 2023 when he presented the 2024 budget.
Mr Ofori-Atta, however, pointed out: "As we all know, our country's 13 per cent tax-to-GDP ratio is far below our peers. Our target is 18-20% and we are on course".
"In that regard, it is difficult to implement all the structural reforms and tax reliefs needed to immediately lower and/or eliminate certain tax handles. However, I assure this August House, that we have heard, we believe in lower taxes for industry, and we are working at this aggressively with the GRA and to be cemented with the standing committee of the Mutual Prosperity Dialogue", he said.
Mr Ofori-Atta, thus, announced the following tax reliefs that have been "prioritised for implementation":
i. Extend zero rate of VAT on locally manufactured african prints for two
(2) more years;
ii. Waive import duties on import of electric vehicles for public
transportation for a period of 8 years;
iii. Waive import duties on semi-knocked down and completely knocked
down Electric vehicles imported by registered EV assembly companies in
Ghana for a period of 8 years;
iv. Extend zero rate of VAT on locally assembled vehicles for 2 more years;
v. Zero rate VAT on locally produced sanitary pads;
vi. Grant import duty waivers for raw materials for the local manufacture of sanitary pads;
vii. Grant exemptions on the importation of agricultural machinery
equipment and inputs and medical consumables, raw materials for the
pharmaceutical industry;
viii. A VAT flat rate of 5 per cent to replace the 15 per cent standard VAT rate on all commercial properties will be introduced to simplify administration.
He said to address the "negative externalities of plastic waste and pollution, the government will review and expand the Environmental Excise Duty to cover plastic packaging, and industrial and vehicle emissions".
Also, he said 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 notified the house that a "simplified tax return will be introduced as a means of promoting voluntary compliance as part of the modified taxation scheme for individuals in the informal sector. This approach will make it easier for taxpayers to fulfil their tax obligations to the State".
Touching on the labour front, Mr Ofori-Atta announced that the Tripartite Committee has concluded negotiations on the National Daily Minimum Wage.
"The tax-free portion of the Individual Income Tax rates will, accordingly be adjusted to take care of the change. Government recognises the constraints our medical personnel face in providing health care for our citizens. With the passage of the Exemptions Act, the government will engage the Ghana Medical Association on waivers for importation of vehicles to ease the transportation burden of our doctors. This policy will enable them to deliver quality and timely healthcare".
He said as a government, "we have always been committed to protecting the quality of life of our people", noting: "Total Wages and Salaries for workers has increased from GH¢14.7 billion in 2016 to GH¢37.5".
"All workers were paid full wages and salaries and on time, even when revenues plummeted during the COVID-19 Pandemic. In the difficult economic challenges, we paid 15 per cent Cost of Living Allowance (COLA) for 6 months in 2022 to cushion 949,122 workers, some 50 per cent more than 2016".
Source: classfmonline.com
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