Government’s decision to separate the Health Insurance Fund Levy and the GETFund component from the 17.5% Value Added Tax (VAT) will burden Ghanaians, an Economist, John Gasti has said.
Finance Minister, Ken Ofori-Atta, presented the 2018 mid-year budget review in Parliament on Thursday, July 19, 2018.
[contextly_sidebar id=”owBpsdhOXJz0kSMoyDBKGoudTLOXGhNp”]Contrary to speculations that VAT and NHIL levy will be increased astronomically, the Finance Minister announced, “there won’t be any increase in VAT.”
He however announced that the Health Insurance Fund Levy and the GETFund components from the VAT have been separated and will now have straight levies of 2.5 percent.
“Both the Health Insurance Fund and the GETFund levies will continue to be 2.5 percent each, while the applicable VAT rate is 12.5 percent,” the Finance Minister, Ken Ofori Atta said during the Mid-Year Budget review on Thursday.
Speaking on Eyewitness News, Mr. Gatsi said Ghanaians will now pay more for goods and services, following government’s decision to levy both the NHIL and GETfund.
“The burden of the people has been increased in disguise. What it means is that the flat rate is going to impose more burden on Ghanaians,” Mr. Gatsi said.
He said the government has resorted to the move out of desperation to generate more revenue.
Apart from the decision to levy the NHIL and GETfund, government among other things revealed it would introduce a new tax known as the high net worth income tax.
In line with the new tax, the government will take 35 percent of incomes of GHC10, 0000 and above as tax.
The Finance Minister also announced a tax on the importation of luxury vehicles with engine capacities of 3.0 liters and above. He, however, did not confirm the percentage to be taxed.
VAT rate increased in disguise; don’t jubilate yet – Terkper
Former Finance Minister, Seth Tekper, has also urged businesses in the country not to rejoice over the 2018 mid-year budget review which supposedly tried not to increase VAT across the board.
According to Terkper, the budget review with regards to separating NHIL and GETFund levies from the 17.5% flat VAT rate is a VAT increase in disguise.
“Ghana’s VAT rate is 17.5 percent, and that includes NHIL (2.5%) and GETFund (2.5 %). Removing them from the VAT base and making them specific rates (instead of ad valorem) and increasing that rate to earn more revenue (quoting Hon Kwarteng) is a ruse,” he stated in a series of tweets on Thursday.
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By: Marian Ansah/citinewsroom.com/Ghana
Follow @EfeAnsah
