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The government of the New Patriotic Party (NPP), led by President Nana Addo Dankwa Akufo-Addo, has enacted various tax measures as part of its fiscal policy to boost revenue generation. These measures underscore the government’s dedication to achieving economic sustainability and delivering crucial public services. The ensuing discussions and debates among stakeholders highlight the importance of acknowledging the government’s endeavors in fostering a sustainable and resilient economy.
The success of these tax implementations hinges on effective communication, transparency, and collaboration between the government and its citizens.
During their first term from 2017 to 2024, the NPP government introduced several new taxes, including:
1. E-Levy:
– Imposing a small percentage on electronic transactions, the E-Levy, or electronic transaction levy, targets revenue from the expanding digital economy, covering mobile money transfers, e-commerce transactions, and digital financial services. The aim is to broaden the tax base and ensure the digital sector contributes proportionately to national development.
2. Emissions Levy Tax:
– Aligned with efforts to combat greenhouse gas emissions, this levy encourages eco-friendly technology and green energy use. The levy amount varies based on vehicle type and engine capacity.
3. **10% Tax on Betting and Lottery Winnings:**
– The Ghana Revenue Authority (GRA) introduced a withholding tax on betting, games, and lottery winnings, automatically deducted at the point of payout.
4. 3% VAT Flat Rate:
– Applicable to VAT-registered retailers of taxable goods with an annual turnover of more than GH¢200,000 but not exceeding GH¢500,000. This rate simplifies the tax process for traders.
5. 5% Increase in VAT:
– This increase, achieved by making the GETFUND levy and NHIL straight taxes, aims to enhance revenue.
6. Luxury Vehicle Tax:
– Imposing an annual levy on high-capacity engine vehicles, the Luxury Vehicle Levy is collected by the Driver and Vehicle Licensing Authority (DVLA) during vehicle registration and annual roadworthy certificate renewal.
7. **50% Increase in Communication Service Tax (CST):**
– CST is levied on charges for electronic communications services, paid by consumers to service providers. The increase contributes to revenue collected by the GRA.
8. COVID-19 Health Recovery Levy:
– A stand-alone levy applied to taxable supplies of goods and services, including a 1% increase on the 3% VAT flat rate and a 1% increase on the 2.5% National Health Insurance Levy.
9. Financial Sector Clean-Up Recovery Levy:
– A 5% levy introduced for recovering costs associated with the financial sector clean-up.
10. **Energy Sector Levies:**
– Various increases in levies on diesel, petrol, and LPG aim to support the transportation of petroleum products and reflect current economic conditions.
11. Excise Duty Amendment Bill 2022, Growth and Sustainability Levy Bill 2022, Income Tax Amendment Bill 2022:
– Parliament enacted laws effective April 3, 2023, impacting excise duty, income tax rates, and the introduction of withholding tax on asset and liability realization.
12. **Increase in Road Fund Levy:**
– Raised from 46 pesewas to 48 pesewas, the Road Fund Levy remains a significant source of financing for routine road maintenance and rehabilitation.