VAT remains 12.5% – Finance Minister asserts

The Minister of Finance, Ken Ofori-Atta, has revealed in the mid-year budget review that there will be no increment in the Value Added Tax (VAT), contrary to speculations by many including the minority in Parliament.

The Minister has stated categorically that the VAT rate will still remain 12.5 per cent and the National Health Insurance Levy (NHIL) will also remain 2.5 per cent, likewise the the GetFund levy.

Presenting the mid-year budget review, Thursday, July 19, on the floor of Parliament, Mr Ofori-Atta admonished Members of Parliament (MPs), especially those from the Minority to source economic information from the right places.

“I’ll also like to advise my friends to stop taking policy directive on economic policies on social media,” he admonished.

A leading member of the New Patriotic Party (NPP) had stated in a suggestive post on Facebook that VAT and the NHIL may be increased to 21.5% in the mid-year budget review.

The Finance Minister himself had suggested in April that government may have to introduce new taxes to increase the revenue base of government to be able to deliver on its promises

The Facebook post, coupled with the Minister’s comments, has since sparked controversy among the public as to the reasons why VAT and NHIL must be increased.

But the Minister allayed fears of any increase in either VAT or NHIL.

Mr Ofori-Atta, however, indicated that government will intensify tax compliance to increase its revenue base.

He also announced a tax on luxury cars as well as a 25 per cent tax on personal income above GH?10,000.

He also noted the Ghana Cedi though depreciating against the US dollar has been at its best for the past six years.