Government to scrap some taxes and reduce some
The decision by the Akufo-Addo-led government to scrap some taxes and reduce some is apt, Bernard Owusu-Mensah, a Financial Analyst, has said.
According to him, some of these taxes should have been abolished a long time ago given the threats they posed to doing business in the country.
During the reading of the budget statement on Thursday, 2 March, Mr Ken Ofori-Atta, Minister of Finance, mentioned, among other things, the scrapping of excise duty on petroleum products. The government also intends to reduce the special petroleum tax rate on petrol from 17.5% to 15%.
Other taxes that will be completely abolished include the following:
1. The 1% special import levy 2. The 17.5% VAT on financial services 3. The 17.5% VAT on selected imported medicines not produced locally 4. The 17.5% VAT on domestic airline tickets 5. The 5% VAT on real estate sales 6. Duty on importation of spare parts
Also, the 17.5% VAT imposed on traders has been replaced with a 3% flat rate, while businesses that employ young graduates from tertiary institutions will get tax credits and other incentives. Furthermore, there will be tax incentives for young entrepreneurs while the Corporate Income Tax will be progressively reduced from 25% to 20% in 2018.
Additionally, Mr Ofori-Atta said the Akufo-Addo government would initiate steps to remove import duties on raw materials and machinery for production.
Speaking on the budget statement on TV3 on Thursday, 2 March, Mr Owusu-Mensah said: “This is positive; some of these taxes should have been removed long ago. For instance, the VAT on the financial sector.”
“You don’t tax too much a sector that is already struggling.”
