Budget: Measures to boost revenue
Mr Ken Ofori-Atta, the Minister for Finance on Thursday announced various measures to guarantee increased revenue and improve efficiency in public spending to ensure the achievement of fiscal targets.
The presentation of the mid-year budget review showed a reduction in electricity tariffs and a zero increase in Value Added Tax (VAT).
The Finance Minister said the suspected VAT increase had evoked mixed feelings among Ghanaians in the business community, however, he assured the public that there will be no increase in VAT as has been speculated.
He noted that VAT would be maintained at 12 and half per cent, adding, “we should stop taking direction on economic policies from social media”, as these platforms are causing revenue leakages in the tax administration system of the government.
Mr Ofori-Atta, however, mentioned some measures agreed upon, to ensure that the government meets its fiscal deficit target of 4.5 per cent.
He said to meet the fiscal deficit target, government would exit the IMF programme and convert the National Health Insurance Scheme to a straight levy of 2.5 per cent as well as convert a GETFund value added tax rate of 2.5 per cent to a straight levy of 2.5 per cent.
Government will also impose a luxury vehicle tax on vehicles with capacity of three litres and above adding, that the levy would be paid on first, the registration of the vehicle and subsequent payment would be paid annually, he said.
The Finance Minister said an additional band of GH¢10,000.00 and above on personal income tax would be reviewed at the rate of 35 per cent per month.
He said as part of efforts to improve revenue performance, the government would strengthen tax compliance and necessary revenue leakages.
“We are intensifying compliance measures to make sure we collect the taxes that are due us”, he said
He mentioned that the government was also rolling out some initiative to address tax compliance issues adding that, “this initiative would include prosecution of tax invaders and corrupt tax officials, a special Vat Attacks force to ensure enforcement and deepen VAT penetration from the current low levels of 11 percent and institutionalised reforms of the Ghana Revenue Authority”.
He said tax compliance would be boosted by the implementation of a common platform, which would include revenue protection assurance unit, mobile money monitoring and Fraud management, to provide government with accurate and comprehensive view of telecom revenue in order to verify tax compliance and to ensure that the comprehensive bailing and collection of all telecom related taxes, levies and regular pull fees are enforced.