Workers will be enjoying an enhanced salary from the end of January 2012 if only Parliament approves the 2012 Budget Statement and Economic Policy of the government. In the Budget Statement to Parliament on Wednesday, November 16, 2011 the Minister for Finance and Economic Planning, Dr Kwabena Duffuor proposed the widening of the income tax band to give workers an enhanced salary. According to the minister, personal income taxation will continue to be used as a measure for equitable distribution of income and also for the protection of low income earners. He said taking cognisance of the current inflation trends in the country, the impact of the real increases in Gross Domestic Product on personal incomes, and to compensate for the loss in purchasing power of income earners, government has revised the income tax thresholds and brackets from 2011 level of GH¢1,104 as follows: First GH¢1,440 Free; next GH¢720 will attract a tax of 5.0 per cent while the next GH¢1,008 will attract 10.0 per cent tax. The next GH¢25,632 will attract a tax of 17.5 per cent and anything exceeding GH¢28,800 will attract a tax of 25.0 per cent. Translating it into real terms, this means that any worker earning GH¢1,500 per month will be paying a tax of GH*222.96 as against GH¢213.26 previously being paid. Based on the new band, the worker will thus be saving GH¢9.70 on monthly basis. Over a period of one year, the worker will be saving GH¢116.40 per annum. A worker earning GH¢2,500 per month will now pay a monthly tax of GH¢424.38 as against GH¢378.64. Again, based on the new band, that worker will be saving GH¢45.74 per month thus saving GH¢548.85 per annum. Those earning between GH¢3,000 and GH¢4,000 per month and based on the same principle the worker will be saving GH¢48.55 per month thus saving GH¢582.60 per annum. Mr Larbi-Siaw, of the Tax Policy Unit at the Ministry of Finance and Economic Planning in an interaction with financial journalists said no government anywhere of takes delight in over taxing its citizen and said the widening of the tax band was to give some level of relief to the average worker. To benefit from more reliefs, the government has asked workers to take advantage of the revision of the personal tax reliefs and file their tax returns for any refund of income tax paid. According to the minister, it has been observed that many individual tax payers are not taking advantage of the tax relief scheme with the reason that the Ghana Revenue Authority will not implement the scheme expeditiously. This the GRA has assured workers of its readiness to fully implement the personal relief refunds to the fullest. Mr Larbi-Siaw said the reduction in the various tax structures was also to give relief to enterprises. In the 2012 Budget Statement, additional tax holidays had been granted to the Ghana Stock Exchange in order to improve the capitalization of the market. In addition, the exemption from capital gain tax has also been extended for further five years to promote investment and deepen activities of the stock market. Mutual funds and unit trusts funds that invest in stocks on the stock market have also been exempted from VAT on financial services. He said in widening the tax net, the government would improve the taxation of professionals and informal sectors and pointed out that the present contribution four per cent in tax effort would be increased to eight per cent in the medium term. The Ghana Trades Union Congress (GTUC) and the Ghana Employers' Association are, however, yet to come out with their views on the 2012 Budget Statement, especially in the area of the widening of the income tax bands.