Government may withdraw Fiscal Stabilization levy in 2017
Citi Business News has learnt that the Ministry of Finance is working to withdrawal the National Reconstruction Levy which imposes 5 percent pretax on profits of some businesses by next year.
The Levy which is also known as Fiscal Stabilization levy has been heavily criticized as a disincentive to the growth of businesses in the country.
Government introduced the levy on July 15, 2013 to help reduce Ghana’s growing deficit.
The categories of companies selected to pay this special tax include telecom service providers, banks, non-banking financial institutions, insurance companies, breweries, and shipping lines, among others.
Speaking to Citi Business News, Tax Consultant Ali Nakyea Abdallah maintained that the removal of the levy was long overdue since it hinders private businesses from expanding.
“What I hear is that come 2017 they are going to remove all the other levies that used to exist, for example the National Reconstruction Levy that is 5 percent of the pretax profit of companies,” he said.
He maintained that since the introduction of the levy three years ago, companies in the country have expressed disaffection to the levy since it unnecessarily reduces the profit of businesses.
“We hoping and praying that when it is removed or repealed it will ease the burden on businesses in the country to create more employment,” he said.
Citing some of the complains that greeted the levy, Mr. Abdallah argued that the services sector of the economy was heavily hit affecting their exponential growth.
He stated that it is pertinent for government to listen to the ‘cry’ of businesses in the country since such levies put undue pressure on their operations.