Business News of Wed, 15 Mar 201710
Clarify how Ghanaians will benefit from tax cuts – Minority demands
The Minority in Parliament is asking government to clarify how its tax cuts announced last two weeks would benefit Ghanaians.
Deputy Minority leader, James Klutse Avedzi, said government has to state the mechanisms it is putting in place to ensure that importers do not increase prices of their products despite abolishment of duties.
Speaking on the floor of Parliament Wednesday during the final debate of the 2017 budget, the Deputy Minority leader said the tax cuts will endanger the country’s economy if it is not handled properly.
Finance Minister, Ken Ofori-Atta has announced the abolishment of duty on importation of spare parts and seven others when he delivered the 2017 budget on March 2.
He explained that government found the taxes, most of which were introduced by the erstwhile National Democratic Congress (NDC), as a nuisance, hence the decision.
(a) Abolish one percent special import levy,
(b) Abolish 17.5 VAT on financial services
(c) Abolish 17.5% VAT on selected imported medicines
(d) Initiate steps to remove import duties on raw materials and machinery
(e) Abolish 17.5 VAT on domestic airline tickets
(f) Abolish 5% VAT on real estates
(g) Abolish excise duty on petroleum
(h) Reduce special petroleum tax rate from 17.5% to 15%
(i) Abolish duties on importation of spare parts.
(j) Abolish levies imposed on Kayayei's by local authorities
(k) Replace the 17.5 VAT on Ghana Stock Exchange (GSE) traders to a flat rate of 3.5 percent
(l) Reduce National Electrification levy
However, the Minority has registered its displeasure with the decision when it was announced on the floor, citing the difficulties it might pose for revenue generation.
Mr Klutse Avedzi said the former NDC government was “gradually turning” the country from import dependency to an export-led economy, adding the tax cuts would unroll those achievements.
“The government in 2016 was able to make a balance of payment surplus of $247 million…as a result of a reduction in import duty by 7.2 percent and an increase in export duty by 5.3 percent,” he said.
"All these measures will not yield any good result for the economy," he said.
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