New tax measures in Mid-Year Budget review takes effect from August 1

New tax measures in Mid-Year Budget review takes effect from August 1
Source: Ghana|Myjoyonline.com | JoyBusiness | AI
Date: 29-07-2018 Time: 09:07:09:pm
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Finance Minister, Ken Ofori-Atta during his presentation in parliament last week

The restructured VAT rate, Luxury Vehicle Tax and 35 percent tax on persons earning more than ¢10,000 cedis is to be implemented from August 1, 2018.

These are some of the revised tax measures Finance Minister Ken Ofori Atta announced in the Mid-Year Budget review last week to help deal with revenue shortfalls. 

The review was also meant to ensure that government ends the year meeting its revised revenue target of ¢51 billion. 

Proposed Amendments Income Tax according to Memo submitted by Finance Ministry 

Documents cited by JoyBusiness indicates that the Finance Ministry is considering reviewing the Income-tax (Amendment) Bill.

This will review the bill to amend the First Schedule of the Income Tax Act  2016 (Act 896) to revise the rates of income tax for individuals and provide for related matters.

The First Schedule of the income tax Act provides for 5 percent income tax bands.

The revision would also look at increasing the rate of income tax from 20 percent to 25 percent.

It is estimated that this tax should bring about ¢171 million in the next six months ending December.

Some business associations were pushing for more time before the tax is implemented even after parliament’s approval this week. But Deputy

Amendments to VAT

The objective to the law is the revise the VAT rate to 12½ percent on the taxable value of good and service and imports

The Amendments would change section 3 of the VAT act 2013 (Act 870) to mandate a taxable person to account for tax payable under that section, at a rate of 12½ percent, calculated on the value of the taxable supply of the goods or services or the value of the import.

Projections

Government is hoping to secure about ¢285 million from August to December 2018.

The various taxes were approved by parliament over the weekend paying the way for the implementation take off.

Timelines for implementation and concerns

Some business associations have been pushing for more time even after parliament passing the act into the law.

But speaking to JOYBUSINESS, Deputy Finance Minister Kweku Kwarteng said they are going ahead with its enforcement, while it works to address those concerns.

“We hope that Parliament is able to work on this as quickly as possible before it rises that the President would provide the accent before July closes and that from the first of August, we will begin to fully enforce the requirement of the new tax measures.

"As far as we are concerned the issues related to it have been fully thought through and resolve passage of the bill will conclude that process. What Parliament passes becomes law that is not subject to perhaps the kind of disagreements and I sent in perspectives as you suggest," he said.

"Once it is law, it is law and our responsibility as government would be to ensure that the law is enforced and the benefits to the economy are obtained,” he added. 

 


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