Minimum Wage Now ?13,500

Government has announced a new minimum wage of ?13,500 a day, from ?11,200. The new wage was arrived at by the tripartite committee, which is made up of the Government, organised labour and employers.

To ensure that workers enjoy the full benefits of a new minimum wage, Government has further announced a reduction in the personal income tax burden on individuals, including the self-employed.

The minimum tax-free threshold has been increased from ?1.5 million to ?1.8 million, which means that the first ?1.8 million of everybody?s annual income shall be tax free.

Delivering a 238-page budget statement and economic policy for this year in parliament yesterday, Mr Kwadwo Baah-Wiredu, Ghana?s minister for finance and economic planning, said a total amount of ?229 billion was expected to be put back in people?s pockets as disposable income in the implementation of this relief.

The minister said the next portion of income which attracts a five per cent rate would be increased from the current ?1.5 million to ?1.8 million.

Mr Baah-Wiredu said the next ?4.8 million, instead of ?3 million as in 2004 would be taxed at 10 per cent. Again, the next ?27.6 million, instead of ?18.6 million in 2004, will be taxed at 15 per cent.

He stated that income tax of 20 per cent would be applicable to income earners of ?36 million, instead of ?33 million.

?The maximum tax rate will be reduced from 30 per cent to 28 per cent and will be applicable to incomes exceeding ?72 million of ?60 million,? the minister said. Mr Baah-Wiredu explained that the Government was mindful of the importance of higher wages in militating hardships and enhancing the productivity of its employees and was committed to improving the remuneration of Ghanaians.

On the Metro Mass Transit system, he said it would be expanded to cover other regional capitals currently not covered, adding that ?the current fleet of 354 will be increased to 950 by the end of the year.?

On housing, the minister said the Government had voted ?150 billion for the construction of low cost houses as part of the national programme to provide 2,000 houses in selected locations in the country.

With reference to ECOWAS, the finance minister said the Government would this year implement the ECOWAS Common Excise tariffs for all items for which the tariffs charged are either the same as those in the ECOWAS protocol or where the differences are negligible.