Parliament has passed the four tax amendments to reflect the reality of government policy as announced in the Mid-Year Budget Review.
The Bills are the Ghana Education Trust Fund (GETFund) Amendment Bill, The National Health Insurance Levy (NHIL) Amendment Bill, The Income Tax Amendment Bill and the Value Added Tax Amendment Bill.
[contextly_sidebar id=”GdWIm07pwr566SVvMzylOqfbTkpfF5mF”]A final Bill, the Luxury Vehicle Levy Bill, is expected to be passed later today [Saturday].
During the Mid Year Budget review, the government announced the separation of the Health Insurance Fund Levy and the GETFund component from the Value Added Tax (VAT).
These two components will now have straight levies of 2.5 percent.
The applicable VAT rate will also now be 12.5 percent, the Finance Minister, Ken Ofori-Atta announced.
He explained that the government was consolidating contributions to the Health Insurance Fund Levy and the GETFund portion of the VAT into a separate Health and Education Levy.
This is to enable the Government to isolate and increase the budget for health and education, the Finance Minister explained.
But critics have described this as an indirect increase in taxes, contrary to the government’s pledge to shift the economy from excessive taxation.
There was speculation prior to the budget review that there would be a significant increase in taxes to support struggling government policies like Free Secondary Education and the ailing National Health Insurance Scheme.
The government based this decision on the below par fiscal performance for the first five months of 2018.
Mr. Ofori-Atta said these measures, among others, are to ensure the government meets its fiscal deficit target of 4.5 percent of GDP.
The government is also imposing a 10 percent luxury vehicle tax on vehicles with an engine capacity of 3.0 litres and above.
The levy, according to the government will be paid on first registration and subsequently annually during renewal.
The Personal Income Tax is also to include an additional band of GH¢10,000 and above per month at a rate of 35%.
By this, the government reclassified workers considered high-income earners.
According to the Finance Minister, the new high net-worth income tax is needed to make the rates charged in the country more equitable.
–
By: Duke Mensah Opoku & Delali Adogla-Bessa/citinewsroom.com/Ghana
