Government increases Value Added Tax by 2.5%

Government has announced an increment in Value Added Tax (VAT) by 2.5 percent for consumers of goods and services.

The move, according to government is expected to improve government's domestic revenue measures while seeking to reach an IMF deal to restore macroeconomic stability.

"Mr. Speaker, we will undertake the following actions, initiatives, and interventions under the seven-point agenda. To aggressively mobilize domestic revenue, we will among others: Increase the VAT rate by 2.5 percent to directly support our roads and digitalization agenda; Fast-track the implementation of the Unified Property Rate Platform programme in 2023; and Review the E-Levy Act and more specifically, reduce the headline rate from 1.5% to one percent (1%) of the transaction value as well as the removal of the daily threshold," he said.

The Minister of Finance, Ken Ofori-Atta, made this known in parliament when he delivered the 2023 budget before lawmakers on Thursday, November 24, 2022.

The presentation is in accordance with Article 179 of the 1992 Constitution and section 21 of the Public Financial Management Act, 2016 (Act 921).

The minister is presenting the 2023 Budget Statement and Economic Policy to parliament in a year that has experienced perhaps, the worst forms of economic downturns in the fourth republic.

Ken Ofori-Atta has also come under a lot of backlash and pressure from both within and outside his party, the New Patriotic Party (NPP), to either resign or be sacked by President Nana Addo Dankwa Akufo-Addo.

MA/ESA