Parliament has recently passed three revenue bills, sparking debate over the scale of taxes levied by the NPP government.
Some are accusing the NPP of reneging on its promise to recall how the tax burden on Ghanaians and businesses could be reduced by scrapping some of the taxes introduced by the then NDC government.Nuisance Taxes”.
It is alleged that the NPP reneged on this promise.
Among these taxes introduced by the previous NDC government were: 17.5 percent VAT/NHIL on financial services, 17.5% VAT/NHIL on imported drugs, 17.5% VAT/NHIL on domestic airline tickets, and an increase in the flat VAT rate from 3% to 15%.
In fact in 2016, the NPP stated in its manifesto specific taxes it intended to reduce or abolish, including the four listed above.
The big questions are: Has the NPP fulfilled its promise of abolishing these 4 taxes as promised? Has the NPP abolished or reduced several other specific taxes that it promised to reduce? How tax friendly is the NPP government to Ghanaians and businesses compared to the NDC?
the truth
The specific and exact number of taxes abolished or reduced by the NPP government in fulfillment of its 2016 election pledge is a matter of public record.
Available documents, including the Parliamentary Hansard, prove the NPP, after assuming office in 2017, has fulfilled its promise of tax abolition and reduction, including the 4 cited against the NDC.
Below are the taxes that were reduced or abolished under the Akufo-Addo government:
1. Abolition of 17.5% VAT/NHIL on real estates
2. Abolition of 17.5% VAT/NHIL on selected imported drugs which are not produced locally
3. Abolition of 17.5% VAT/NHIL on financial services
4. Import duty on import of spare parts has been abolished.
5. 1% Special Import Tax Abolished
6. 17.5% VAT on domestic airline tickets has been abolished
7. The levies levied on the Kayayei by local authorities are abolished
8. Import duty has been reduced on certain goods and vehicles
9. Excise duty on petroleum abolished
10. Full corporate tax deduction provided to private universities plowing back 100% of profits to the university
11. National Electrification Scheme tax reduced from 5% to 3%
12. Public lighting charges reduced from 5% to 2%
13. Special petroleum tax rate reduced from 17.5% to 13% and specific rates introduced
14. Rate of 17.5 VAT/NHIL replaced with flat rate of 3% for traders
15. Subsidized capital gains tax exemption on shares traded in publicly held securities approved by the Ghana Stock Exchange or the SEC
16. Abolished Income Tax on Mutual Fund and Unit Trust Schemes
17. Income tax on REIT abolished
18. Reviewing tax threshold for flat VAT
19. Reduction in withholding tax for gold exporters from 3% to 1%.
20. Abolition of VAT on lotto stocks
21. Abolition of 7.5% income tax on lotto agents’ commission and tax on lotto winnings
The number of taxes listed as cut or abolished by the AkufoAddo government is, without a doubt, the largest rollback of taxes by any government in Ghana.
Interestingly, the record showed that revenue collection in nominal cedi terms increased by 25% annually after 2017 until Covid-19 hit the economy in 2020, despite taxes abolished and reduced in 2017.
From the above, the Akufo-Addo government is clearly tax friendly.
Source: Peacefmonline.com/Ghana
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