Over 23,000 workers in the public sector would be affected by the 35% tax slapped on persons who earn GHc10,000 and above.
Speaking on Citi TV’s morning show, Breakfast Daily on Friday, deputy Finance Minister, Abena Osei Asare, said the taxes are supposed to help bridge government’s revenue target deficit.
“We did the background checks, and we realized that in the public sector alone, we could have about 23,000 people in that bracket. So we said if we apply that level of tax, it will help us achieve some revenue to help us close that gap,” she said.
The Minister of Finance, Ken Ofori-Atta announced the introduction of a new tax known as the high net worth income tax during the presentation the 2018 mid-year budget review in Parliament on Thursday
[contextly_sidebar id=”24h6fsFJWJUuuXA53cezmMXAwOxJnP2i”]In line with the new tax, the government will charge 35 percent on incomes over GHC 10,000.
This he said forms part of measures by the government to meet its revenue target for the 2018 fiscal year.
The announcement has been met with mixed reaction.
Speaking on Breakfast Daily, Abena Osei Asare defended the new tax saying it is better to push it on people considered as “rich” than the poor.
“We’re saying that anybody who earns above GHc10, 000, we will apply a tax of 35%. We believe that in a country where we want to build together, it is better to redistribute wealth when the need arises, to take something small from the rich and then redistribute it for all of us… This time we are not passing it on to the poor,” she added.
5 personal income tax bands
Ghana hitherto had five band income tax rates.
Before the introduction of the sixth income tax band, the highest rate was 25% tax on incomes exceeding GHc 3,240.
More taxes introduced
Ken Ofori-Atta, while presenting the budget review also said the government has separated the GETFund and NHIL components from the 17.5% VAT rate.
He said the GETFund and NHIL levies will now have straight levies of 2.5 percent each.
The Finance Minister also announced a 3.5% tax on the importation of luxury vehicles with engine capacities of 3.0 liters and above. He, however, did not state the percentage to be charged.
The levy according to the Finance Minister will be paid on first registration, and subsequently during annual renewal.
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By: Godwin Akweiteh Allotey/citinewsroom.com/Ghana
Follow @AlloteyGodwin
