Ghana’s New Patriotic Party (NPP) formally declared, at the end of 2016, their agenda for the governance of the country when it assumed the reins of power, with the launch of its manifesto. The manifesto contained several promises to address the challenges that the Ghanaian economy faced including the abolishing of what the then Vice Presidential Candidate (now Vice President) famously described as “nuisance taxes.”
With the NPP’s assumption of office and based on their manifesto, the Government’s to-do list is expected to include the following:
- Reduce the corporate tax rate from 25% to 20%
- Remove import duties on raw materials and machinery for production within the context of the ECOWAS Common External Tariff Protocol
- Abolish the Special Import Levy
- Abolish the 17.5% Value Added Tax (VAT) and National Health Insurance Levy (NHIL) on imported medicines not produced in the country
- Abolish the 17.5% VAT and NHIL on financial services
- Abolish the 5% VAT and NHIL on real estate sales
- Abolish the 17.5% VAT and NHIL on domestic airline tickets
- Reduce VAT and NHIL for micro and small enterprises from the current 17.5% to the 3% VAT and NHIL flat rate
- Introduce tax credits and other incentives for businesses that hire young graduates from tertiary institutions
- Review withholding taxes imposed on various sectors (including the mining sector) that have constrained the liquidity of many businesses
- Provide tax and related incentives for manufacturing businesses in sectors such as agro-processing, light industries, pharmaceuticals, petrochemicals, garments and textiles, among others
The new Government has not provided timelines for the introduction of the above changes in the tax law. However, it is expected that the first Economic Policy and Budget Statement of the Government, expected to be presented to the Parliament of Ghana in March 2017, will provide for some of these tax reforms.
EYG no. 00467-171Gbl
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